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

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

No 1712, Working Paper Series from European Central Bank

Abstract: The sovereign debt crisis in the euro area has increased the interest in early warning indicators, with the aim to indicate the build?up of fiscal stress early on and to facilitate crisis prevention by 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. JEL Classification: E62, E65, E66, H62, H63, F34

Keywords: debt management; deficit surplus; fiscal policy; general outlook and conditions; international lending and debt problems; sovereign debt; studies of particular policy episodes (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-eec and nep-mac
Note: 166869
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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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:ecb:ecbwps:20141712

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