Signalling fiscal stress in the euro area: A country-specific early warning system

Pablo Hernández de Cos, Enrique Moral-Benito, Gerrit Koester and Christiane Nickel ()

No 1418, Working Papers from Banco de España

Abstract: The sovereign debt crisis in the euro area has raised interest in early warning indicators, aimed at signalling the build-up of fiscal stress in advance and helping prevent crises by means of a timely counteraction of fiscal and macroeconomic policies. This paper presents possible improvements to enhance existing early warning indicators for fiscal stress, especially for the euro area. We show that a country-specific approach could strongly increase the signalling power of early warning systems. Finally, we draw policy conclusions for the setting-up and application of a system of early warning indicators for fiscal stress.

Keywords: fiscal policy; studies of particular policy episodes; general outlook and conditions; deficit; surplus; debt; debt management; sovereign debt; international lending and debt problems. (search for similar items in EconPapers)
JEL-codes: E62 E65 E66 F34 H62 H63 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014-07
New Economics Papers: this item is included in nep-eec and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (14)

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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... /14/Fich/dt1418e.pdf First version, July 2014 (application/pdf)

Related works:
Working Paper: Signalling fiscal stress in the euro area - a country-specific early warning system (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1418

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