The need for economic policy coordination between Europe, Japan, and the United States: Policy recommendations for the 1990s

Anthonie Knoester and André Kolodziejak ()

Open Economies Review, 1994, vol. 5, issue 4, 327-346

Abstract: Better policy coordination between Europe, Japan, and the United States is urgently needed in order to restore economic growth and to diminish mutual trade imbalances. Using the EC Compact model it is shown how coordinated fiscal policies can contribute to reaching these goals in the 1990s. For Europe, the most plausible fiscal policy option seems to be a combination of lower direct taxes, public spending cuts, and wage moderation; for Japan a more expansionary fiscal policy is feasible. For the United States, however, public spending cuts or tax increases are necessary conditions for better economic performance. In addition, for all three blocks a swap between tax reduction and wage moderation is recommended. Copyright Kluwer Academic Publishers 1994

Keywords: International policy coordination; OECD fiscal policies; trade imbalances; economic growth; inverted Haavelmo effect; wage moderation (search for similar items in EconPapers)
Date: 1994
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DOI: 10.1007/BF01000718

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