 The impact of preferences on early warning systems — The case of the European Commission's ScoreboardEuropean Journal of Political Economy, 2014, vol. 34, issue C, 157-166 Abstract: The European Commission's Scoreboard of Macroeconomic Imbalances is a rare case of a publicly released early warning system. It allows the preferences of the politicians involved to be analysed with regard to the two potential errors of an early warning system — missing a crisis and issuing a false alarm. These preferences might differ with the institutional setting. Such an analysis is done for the first time in this article for early warning systems in general by using a standard signals approach, including a preference-based optimisation approach, to set thresholds. It is shown that, in general, the thresholds of the Commission's Scoreboard are rather tight (resulting in more alarm signals), as compared to a neutral stand. Based on political economy considerations the result could have been expected. Keywords: Early warning system; Scoreboard; Preferences; Incentives; Political economy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:34:y:2014:i:c:p:157-166 DOI: 10.1016/j.ejpoleco.2014.01.008 Access Statistics for this article European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung More articles in European Journal of Political Economy from Elsevier |
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