A comparison of structural reform scenarios across the EU member states - Simulation-based analysis using the QUEST model with endogenous growth

Francesca D'Auria, Andrea Pagano, Marco Ratto and Janos Varga

No 392, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper calibrates the Roeger-Varga-Veld (2008) micro-founded DSGE model with endogenous growth for all EU member states using country specific structural characteristics and employs the individual country models to analyse the macroeconomic impact of various structural reforms. We analyse the costs and benefits of reforms in terms of fiscal policy instruments such as taxes, benefits, subsidies and administrative costs faced by firms. We find that less R&D intensive countries would benefit the most from R&D promoting and skill-upgrading policies. We also find that shifting from labour to consumption taxes, reducing the benefit replacement rate and relieving administrative entry barriers are the most effective measures in those countries which have high labour taxes and entry barriers.

Keywords: Structural reforms; endogenous growth; DSGE modelling; EU member states; tax credits; tax shifts; entry barriers; human capital; D'Auria; Pagano; Ratto; Varga (search for similar items in EconPapers)
JEL-codes: E32 E62 O30 O41 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2009-12
New Economics Papers: this item is included in nep-cmp, nep-dge, nep-eec, nep-fdg, nep-ino and nep-mac
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Citations: View citations in EconPapers (43)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0392

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