France: Selected Issues

International Monetary Fund

No 2006/390, IMF Staff Country Reports from International Monetary Fund

Abstract: U.S. shocks explain a large part of French output common components. This paper analyzes the economic implications of two alternative welfare financing reforms: a reduction in payroll taxes funded by an increase in consumption taxes, and the other funded by a new levy on business value added. The importance of financial market constraints and whether the recent mortgage market reform is likely to ease these constraints is assessed. Rechargeable mortgages are attractive and encourage collateralization, but bolder measures are needed to limit legal and other fees.

Keywords: ISCR; CR; employer; consumption; firm; USA supply shock; consumer confidence; terms of trade; exchange rate; U.S.-driven demand shocks; monetary policy; current account; housing loan; home equity; Mortgages; Consumption taxes; Labor taxes; Employer contributions; Supply shocks; Global; Europe (search for similar items in EconPapers)
Pages: 121
Date: 2006-10-31
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