Assessing Next Generation EU

Lorenzo Codogno and Paul Van den Noord

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The unprecedented fiscal package adopted by the European Council in the summer of 2020 ―dubbed Next Generation EU―is vital for the recovery of the euro area from the pandemic shock. However, there are risks that targets will not be met and that it may prove difficult to muster the same degree of European ‘solidarity’ in the future. Computations with a stylised macroeconomic model indicate that an alternative approach, with ex ante risk sharing through the creation of a Eurobond and permanent fiscal capacity at the centre, would be at least as powerful, yet it would be more sustainable, automatic and timely.

Keywords: fiscal policy; business fluctuations; safe sovereign assests; fiscal capacity (search for similar items in EconPapers)
JEL-codes: E32 E63 F33 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2021-02
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http://eprints.lse.ac.uk/124232/ Open access version. (application/pdf)

Related works:
Chapter: Assessing Next Generation EU (2022)
Working Paper: Assessing Next Generation EU (2021)
Working Paper: Assessing Next Generation EU (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:124232

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