Back Matter

Back Matter

Author(s):
Martin Schindler, Helge Berger, Bas Bakker, and Antonio Spilimbergo
Published Date:
April 2014
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    Contributors

    S. Ali Abbas is a Senior Economist in the European Department of the IMF.

    Bernardin Akitoby is Division Chief in the Fiscal Affairs Department of the IMF.

    Derek Anderson is a graduate student in Economics at the University of Virginia.

    Jochen Andritzky is an Economist in the European Department of the IMF.

    Ruben Atoyan is the IMF’s Resident Representative to Bosnia and Herzegovina.

    Bas B. Bakker is Advisor in the European Department of the IMF.

    Bergljot Bjørnson Barkbu is the IMF’s Deputy Resident Representative to the European Union.

    Helge Berger is Advisor in the European Department of the IMF.

    Fabian Bornhorst is the IMF’s Resident Representative to Brazil and Bolivia.

    Cristina Cheptea is a Senior Research Analyst in the European Department of the IMF.

    Jaime Guajardo is a Senior Economist in the Asia & Pacific Department of the IMF.

    Ioannis Halikias is a Senior Economist in the European Department of the IMF.

    Emilia Jurzyk is an Economist in the European Department of the IMF.

    Takuji Komatsuzaki is an Economist in the Fiscal Affairs Department of the IMF.

    Dmitriy Kovtun is a Senior Economist in the European Department of the IMF.

    Huidan Lin is an Economist in the European Department of the IMF.

    Lusine Lusinyan is a Senior Economist in the Western Hemisphere Department of the IMF.

    Jonathan Manning is a Research Analyst in the European Department of the IMF.

    Alexis Meyer-Cirkel is an Economist in the Strategy, Policy, and Review Department of the IMF.

    Dirk Muir is an Economist in the Research Department of the IMF.

    Zuzana Murgasova is Advisor in the European Department of the IMF.

    Jesmin Rahman is Deputy Chief in the European Department of the IMF.

    Marta Ruiz-Arranz is Deputy Division Chief in the Fiscal Affairs Department of the IMF.

    Martin Schindler is a Senior Economist in the European Department of the IMF.

    Dustin Smith is a Research Analyst in the European Department of the IMF.

    Antonio Spilimbergo is Advisor in the European Department of the IMF.

    Suchanan Tambunlertchai is an Economist in the Strategy, Policy, and Review Department of the IMF.

    Justin Tyson is a Senior Economist in the European Department of the IMF.

    Delia Velculescu is Deputy Chief in the European Department of the IMF.

    Li Zeng is an Economist in the European Department of the IMF.

    Tianli Zhao is a Ph.D. candidate in Economics at Cornell University.

    Index

    [Page numbers followed by b, f, n, or t refer to boxes text, figures, footnotes, or tables, respectively.]

    A

    • Active labor market policies

      • classification of European economies by, 101–102

      • effects of, 103, 104, 106, 116, 152, 159, 160

      • goals of, 159

      • implementation in Europe, 108–109

    • Albania

      • labor market challenges in, 6, 125, 132, 143–145

      • strategies for promoting job growth in, 145

      • See also Balkan economies

    B

    • Balance sheet problems

      • consolidation to minimize impact on growth, 5

      • cross-border spillovers in simultaneous deleveraging, 13

      • cross-sector spillovers, 3, 14, 31–32, 35, 63

      • euro area debt levels, 16, 17f

      • future prospects, 29

      • growth and, 26–27, 27f, 30–31, 32

      • indicators of, 15–16

      • migration of debt from private to public sector, 25, 26f

      • as obstacle to recovery, 3–4, 13, 34–35

      • significance of, for economic performance, 14–15

      • See also Debt reduction, financial sector;

      • Debt reduction, private sector; Debt reduction, sovereign

    • Balkan economies

      • business environment of, 139, 140f, 143

      • capital flows, 138–139, 140f, 143, 145

      • causes of poor performance of, 127–128, 143–145

      • countries of, 125, 146t. See also specific country

      • cross-country heat map of, 143, 144f

      • current account imbalances in, 222f

      • data sources, 147–148t

      • employment protection legislation in, 132

      • employment/unemployment rates in, 125–127, 126f, 128f, 129f, 140f

      • future challenges and opportunities for, 6

      • growth, 129f

      • labor and human capital flows, 138, 139, 141f

      • labor market challenges in, 125

      • labor market comparison to European core countries, 125–127, 126f

      • labor tax wedges in, 136–138, 137f

      • lessons from reform experience of, 125

      • minimum wage in, 136, 137f

      • remittances to, 142–143

      • sectoral distribution, 139, 141f

      • strategies for promoting job growth in, 145

      • unemployment benefits program of, 129–132, 130f, 131f

      • unfinished reforms as barrier to job growth, 138–143

      • unit labor costs in, 134, 135f

      • wage bargaining in, 133–134

      • wage rigidities in, 134, 136f

      • See also Emerging

      • European economies with fixed exchange rates

    • Banking sector

      • affordability of financial services, 179

      • financial services access, 179, 180, 187, 188

      • indebtedness in, 24

      • lending rates, 19

      • measures of policy efficiency in, 191t

      • migration of debt to public sector from, 25, 26f

      • nonperforming loans, 24, 25f

      • reform efficiency analysis, 198t

      • reforms to increase competition in, 187

      • reforms to promote near-term growth, 8–9

      • reforms to support deleveraging and growth, 32–34

      • return on equity, 24, 25f

      • See also Debt reduction, financial sector

    • Bosnia and Herzegovina

      • labor market challenges in, 6, 125, 132, 145

      • strategies for promoting job growth in, 145

      • unemployment benefits in, 130–131

      • See also Balkan economies

    • Brain drain, 139, 141f

    • Bulgaria

      • corporate saving–investment balance, precrisis, 45

      • global financial crisis outcomes in, 40

      • potential growth impacts of policy reforms, 181

      • See also Emerging

      • European economies with fixed exchange rates

    • Business environment, 190t

      • of Balkan countries, 139, 140f, 143

      • best practices analysis of policies in Europe, 176

      • effects on growth, 179, 190t

      • reform efficiency analysis, 195–196t

    C

    • Capital flows

      • to Balkan economies, 134, 138–139, 140f, 145

      • evolution of current account imbalances in Europe, 220, 221f, 232, 233–236

      • postcrisis, 48, 48n, 108, 225–226, 233

      • precrisis, 134

      • See also Foreign direct investment

    • Central bank responses to financial crisis, 2, 226

    • Central European countries. See Czech

      • Republic; Hungary; Poland; Slovak

      • Republic

    • Child care services, 159

    • China, 98, 247

    • Competitiveness

      • cost-benefit analysis of reform to promote, 187

      • evolution of current account imbalances in Europe, 220–221

      • labor market reforms and, 160

      • product market reforms and, 151, 152f, 155

      • reform strategies to enhance, 7

      • structural shocks preceding global financial crisis and, 97–98

    • Construction sector employment, 57–58, 59t

    • Corporate debt

      • economic sector distribution, 20

      • evolution of current account imbalances in Europe, 221

      • growth and, 26–27, 27f, 30–31, 32

      • historical experience with deleveraging, 29–30, 30f

      • household balance sheet linkage, 39

      • insolvency risk, 20–21

      • interaction in multi-sector debt, 31, 35, 39

      • international comparison, 16, 17f

      • linkage to employment, 44, 60

      • migration to public sector, 25, 26f

      • postcrisis current account adjustment, 226

      • precrisis, 41, 45–48, 45f, 50–51, 60

      • saving–investment balance, postcrisis, 48

      • saving–investment balance, precrisis, 45, 46f, 47f

      • unemployment and, 26, 27f, 39

      • variation within euro area, 16–17, 18–19, 18f, 19f

      • See also Debt reduction, private sector

    • Corporate governance, 189–190t, 199t

    • Corporate profit

      • employment negatively correlated with, 52, 53f, 54, 55f, 58–60, 61, 61t

      • labor productivity and, 52, 53f

      • negative correlation with output

      • growth, 52, 52f, 54

      • postcrisis, precrisis borrowing, 45–48

      • postcrisis, precrisis debt and, 60

      • postcrisis employment and, 41–44

      • postcrisis growth of, 48–51, 50f, 51f

      • postcrisis wage bill and, 41–44

      • precrisis wage bill and, 45–48

      • pressure to increase, precrisis, 48–50

      • See also Corporate debt

    • Corruption, 179, 187, 191t, 200t

    • Credibility of reforms, 77–79, 78f, 85, 168–169, 168f

    • Current account balances

      • cyclical position and, 227, 229t

      • decomposition, 233–237, 234f, 235f

      • determinants of, in Europe, 227–233, 233t

      • employment and, 57–58, 59t

      • external competitiveness and, 229–230t, 232

      • external environment and, 231t, 232

      • future challenges, 220

      • import compression and, 237

      • lessons from adjustment experiences in Europe, 238

      • patterns, 219

      • postcrisis evolution, 224–227, 225f, 237–238

      • postcrisis savings and investment patterns, 228f

      • precrisis savings and investment patterns, 221–224, 223f, 228f

      • rationale for adjustment, 219

      • recent evolution of, 220–221, 221f, 229–231t

      • recovery from global financial crisis, 2, 3f

      • regional differences in, 8, 221–224

    • Cyclically adjusted primary fiscal balances, 74

    • Czech Republic

      • corporate saving–investment balance, precrisis, 48

      • trade, 247, 251, 253

    D

    • Debt reduction, financial sector

      • consolidation strategies, 15

      • in feedback loop in balance sheet recession, 14–15, 15f, 35

      • policy prescriptions to mitigate impact on growth, 32–34

      • reform rationale, 35

    • Debt reduction, private sector

      • consolidation strategies, 14

      • effects of cross-sector simultaneous deleveraging, 13

      • in feedback loop in balance sheet recession, 14–15, 15f, 31, 35, 39

      • future challenges for, 4

      • historical experience with, 27–30

      • policy prescriptions to mitigate impact on growth, 4–5, 9, 32–34

      • public sector debt reduction and, 4–5

      • reform rationale, 13–14, 35

    • Debt reduction, sovereign

      • consolidation strategies, 15

      • design and sequencing of policies for, 4–5

      • effects of cross-sector simultaneous deleveraging, 13

      • in feedback loop in balance sheet recession, 14–15, 15f

      • fiscal consolidation and, 74–76

      • future challenges in, 70

      • growth and, 4, 5, 71–72, 71f, 73f, 74

      • historical experiences with, 90–91t

      • lessons from historical experience, 67–68

      • mechanisms of, 70–76

      • primary fiscal balances and, 70–71, 71f, 72

      • private sector debt and, 4–5

      • See also Fiscal consolidation for public debt reduction in low-growth conditions; Public debt

    • Deleveraging. See Debt reduction, financial sector; Debt reduction, private sector; Debt reduction, sovereign

    • Denmark, 181

    • Duality, labor market

      • associated problems, 6, 44–45, 104, 105, 106–107, 108

      • causes of, 44–45, 100

      • employment growth and, 55, 57, 58t, 60, 105

      • in Italy, 115, 117, 118

      • patterns and trends, 6, 55, 56f

      • reform effects on, 104, 105, 106–107, 109, 117, 121

      • as reform target, 87

      • in Spain, 120, 120f

    E

    • Early retirement, 101, 106, 111, 152, 170

    • Education, 175, 187, 193t, 200t

    • Emerging European economies with fixed exchange rates

      • challenges to current account adjustment, 220

      • countries of, 219n

      • decomposition of current account, 235f, 236–237

      • determinants of current account imbalances in, 232–233, 233t

      • evolution of current account imbalances, 48, 48n, 219, 220, 221, 222f

      • export growth, postcrisis, 8, 226

      • postcrisis current account, 224–226, 225f, 227, 237–238

      • postcrisis savings and investment in, 228f

      • precrisis savings and investment in, 221–224, 223f, 228f, 237

      • public sector debt in, 224

      • similarity index of exports, 251, 251f

    • Employment

      • in Balkan economies, 125–127, 126f, 128f, 129f

      • case studies of labor policies and outcomes, 109–122

      • causes of postcrisis changes in, 41–44, 56–60, 58t, 60f, 97, 122

      • construction sector, 57–58, 59t

      • corporate debt and, 26, 27f, 44, 60

      • corporate profit and, 52, 53f, 54, 55f, 56, 58t

      • current account balance and, 57–58, 59t, 232, 236

      • financial shock effects on, 44–45

      • global crisis outcomes, 39–41, 40f, 97

      • growth and, 39–44, 40f, 42f, 43f, 52, 56, 58t

      • labor market duality and, 57, 60, 104, 105, 106–107

      • lessons from postcrisis corporate adjustment, 61–63

      • medium-term strategies to promote, 1

      • minimum wage rules and, 136

      • modeling product market reform outcomes, 155

      • near-term strategies to promote, 1

      • partial equilibrium effects of labor policies, 103–104, 122

      • postcrisis corporate profits and, 41–44, 61, 61t

      • postcrisis outcomes of labor market reforms, 107–108, 108f

      • regional comparison, 3f

      • remittances and, 140–143, 142n

      • structural policies influencing, 97

      • tax reform to promote, 160–162

      • unemployment rate in European countries (1990s–2010s), 107f, 126f, 128f, 129f

      • unfinished reforms in Balkans as barrier to growth in, 138–143

      • wage adjustment and, 41–44, 55–56, 62

      • work time flexibility, 113–114

      • See also Employment protection legislation; Labor costs; Labor market; Wages

    • Employment protection legislation

      • in Balkan economies, 132

      • best practices analysis of policies in Europe, 176

      • classification of Euorpean economies with, 101–102

      • growth and, 179

      • labor market duality and, 104, 105

      • outcomes of, 100, 101, 103, 106, 132, 159, 160

      • productivity and, 159

      • redundancy rules and costs in Europe, 132, 133f, 176, 179

      • transitional dynamics of, 105

    • Estonia

      • corporate investment in, 224

      • employment in, 108

      • See also Emerging

      • European economies with fixed exchange rates

    • Euro adoption, 98–99, 99f

    • Euro area

      • comprehensive approach to reform in, 7

      • corporate debt in, 18–19, 19f

      • corporate insolvencies in, 20–21

      • current account balances, 8, 219

      • debt in, as challenge to growth, 13–14

      • debt patterns in, 16–17, 17f, 18f

      • debt reduction strategies, 32–35

      • financial sector balances in, 24, 25f

      • future prospects, 87

      • historic public sector deleveraging episodes in, 27–32

      • household assets in, 22, 24f

      • household debt in, 21–24, 21f, 23f, 24f

      • labor costs in, 112, 112f

      • net lending/borrowing, 16, 18f

      • policy response to financial crisis, 2

      • postcrisis labor market, 107–109

      • precrisis growth, 5, 68, 69f

      • public debt in, 25, 25f

      • recommendations for monetary policy in, 34

    • Euro area periphery

      • capital inflows, 48n, 99

      • challenges to current account adjustment in, 220

      • current account balances in, 219, 220

      • decomposition of current account in, 233–236, 234f

      • determinants of current account imbalances in, 8, 232–233, 233t

      • evolution of current account imbalances in, 220, 221, 222f, 224

      • labor costs in, 101

      • modeling labor market reform outcomes in, 160

      • modeling product market reform outcomes in, 158, 158t

      • postcrisis current account in, 224, 225f, 226–227, 227, 237–238

      • postcrisis savings and investment in, 228f

      • precrisis savings and investment in, 221, 223f, 224, 228f, 237

      • projected outcomes of structural reforms in, 7, 171

      • similarity index of exports, 251, 251f

      • simultaneous structural reforms in euro core area and, 163–166, 165t, 166t, 167t

      • structural reforms in response to global financial crisis, 122, 151

      • trade balance, postcrisis, 226

      • unemployment in, 97

      • See also Balkan economies; Greece, Ireland, Italy, Portugal, and Spain

    • Euro core area

      • corporate profit in, 48, 52

      • current account balances, 2, 2f

      • growth spillovers to periphery, 6–7

      • modeling labor market reform outcomes in, 160

      • modeling product market reform outcomes in, 158, 158t

      • opportunities for growth in, 4

      • productivity in, 6f

      • simultaneous structural reforms in euro periphery and, 163–166, 165t, 166t 167t

      • structural reforms in response to global financial crisis, 151

    • Europe

      • aggregate debt level, 16, 17f

      • best practices analysis of structural reforms in, 178t, 179f

      • corporate debt in countries of, 16–17, 18–21, 19f

      • current account balances in, 219

      • export growth of, 240–241, 240f

      • future challenges and opportunities for, 1, 9

      • growth trends, 2, 2f

      • historical debt reduction experiences in, 79–84, 79f, 81–83f

      • historical growth compared to U.S., 5, 6f

      • household balance sheets in, 23f, 24f

      • household debt in countries of, 16–17

      • modeling structural reform outcomes in, 152–166

      • net lending/borrowing patterns in, 18f

      • postcrisis labor market reforms and outcomes in, 151–152, 153f

      • product market reform outcomes in, 158, 158t

      • projected outcomes of structural reforms in, 171

      • public debt in countries of, 16–17

      • recent (2005–2013) economic performance, 1, 2, 2f, 3f

      • regional differences, 176–177, 177t, 179–181, 180f, 184–185, 184f, 185t, 187t

      • shortcomings of postcrisis structural reforms, 151–152

      • structural reforms in response to global financial crisis, 151

      • vulnerability to global financial crisis, 1

      • See also Balkan economies; Emerging

      • European economies with fixed exchange rates; Euro area; Euro area periphery; Euro core area

    • European Central Bank, 226–227

    • European Union

      • new member states of, 127, 133, 138, 139, 142, 143–145

      • postcrisis labor developments in, 39, 41, 98

      • precrisis convergence growth in, 99f

    • Exchange rate

      • in evolution of current account imbalances, 232

      • export growth and, 251–252

      • labor market reform outcomes for, 160

      • in public debt reduction outcomes of fiscal consolidation, 81

      • wages and, before and after euro adoption, 98–99, 99f

      • See also Emerging European economies with fixed exchange rates

    • Exports

      • benefits of intra-euro reform coordination, 163–165

      • data shortcomings, 239, 241

      • from emerging European economies, 225f, 226, 237

      • of euro area periphery, 99, 101, 225f, 226, 237–238

      • exchange rate stability and, 251–252

      • foreign-value-added component, 239–241

      • German, 113, 113f

      • global competition, 98, 101

      • historical debt-reduction experiences and, 81, 83f

      • policy reforms for long-term growth, 8, 155–158, 162

      • recent evolution of value-added components, 242–247

      • sector-related performance in, 254–255, 255f

      • significance of, for growth, 101, 239, 240f, 244, 255–256

      • similarity between economies as factor in growth of, 250–251, 251f

      • value-added decomposition of, 241–242, 242f

      • See also Value-added trade; Vertical supply links

    F

    • Financial services access, 179, 180, 187, 188, 199t

    • Finland, 45, 108, 181

    • Firing taxes, 103, 104

    • Fiscal consolidation for public debt reduction in low-growth conditions

      • credibility effects in implementation of, 77–79, 78f, 85

      • current challenges to, 69–70, 84

      • economic determinants of success in, 74–76, 75f, 76f, 80–84, 81f, 82f, 83f

      • external demand and, 81

      • historical experiences with, 4, 67–68, 70–74, 79–84, 79f, 87, 90–91t

      • inflation and, 84, 86–87

      • interest rates and, 72–74, 75–76, 82

      • monetary policy and, 82, 85

      • policy implementation considerations, 4–5, 9, 68, 84–85, 88

      • private sector debt reduction and, 67

      • privatization and, 85–86

      • short-term effects, 67, 68, 75, 76–78, 84–85, 88

      • structural reforms and, 87, 88

    • Fiscal policy

      • during deleveraging episodes, 4, 28–29, 29f

      • in emerging European economies, 224, 233

      • in euro area periphery, 220, 237

      • evolution of current account imbalances

      • in Europe, 232–233

      • to facilitate balance sheet adjustment, 34

      • public debt reduction, 67

      • See also Fiscal consolidation for public debt reduction in low-growth conditions

    • Foreign direct investment

      • flows to Balkan economies, 6, 138–139, 140f, 143, 145

      • precrisis global competition and, 98

    • Former Yugoslavia Republic of Macedonia, 6, 125, 143–145. See also Balkan

    • economies France, 108

    G

    • Germany

      • corporate balance sheets in, 4, 48

      • current account balance in, 219

      • global financial crisis outcomes in, 39

      • growth composition, 113, 113f

      • labor costs in, 112, 112f

      • labor market institutions and reforms in, 109–110t

      • labor market outcomes of precrisis reforms in, 106, 108, 122

      • labor market policies and outcomes in, 110–114, 113f, 114f

      • similarity index of exports, 251, 251f

      • unemployment rate, 110, 111f, 112f

      • work time flexibility, 113–114

    • Global financial crisis (2008)

      • causes of employment outcomes after, 41–44

      • corporate profit after, 41–44, 45–51

      • corporate saving-investment balance before, 41, 45–48, 47f, 48f

      • current economic performance and, 1, 2

      • employment outcomes, 39–41, 40f, 97

      • Europe’s vulnerability to, 1

      • growth outcomes, 69f

      • lessons from corporate adjustment after, 61–63

      • obstacles to recovery from, 3–4, 5–6

      • policy response to, 2, 3, 69, 117–118, 151

      • public debt outcomes, 67, 68–70

      • recovery outcomes to date, 1, 2, 2f, 3f

      • structural balances, 69–70, 69f

    • Global Integrated Monetary and Fiscal model, 6–7

    • Globalization

      • integration in cross-border production chains to promote growth, 239, 244, 255–256

      • significance of, in economic recovery, 239

      • See also Technology and globalization shocks

    • Greece

      • current account balance, 219

      • employment, 58–60

      • potential growth impacts of policy reforms, 181

      • privatization experience, 85–86 trade policy, 256

      • See also Euro area periphery; Greece,

      • Ireland, Italy, Portugal, and Spain

    • Greece, Ireland, Italy, Portugal, and Spain

      • composition of output, 3–4

      • current account balance, 221, 224

      • GDP, 5

      • growth spillovers from Euro core to, 6–7

      • policy response to global financial crisis, 151

      • See also Euro area periphery; individual country

    • Growth

      • balance sheet stress and, 14–15, 26–27, 27f, 30–31, 32

      • contributions to, 113, 113f

      • corporate profit negatively correlated with, 52, 52f, 54

      • effects of global financial crisis, 1

      • effects of multi-sector debt, 31

      • employment and, 39–44, 40f, 42f, 43f, 56, 58t

      • external environment for, 239

      • future prospects for, 1, 2, 68, 70

      • global economic linkages for, 8

      • global effects of intra-euro area coordination of reforms, 166, 167t

      • importance of exports in, 239–241

      • integration in cross-border production chains for, 239, 244, 255–256

      • labor market reform outcomes, 160

      • labor productivity and, 52–54, 54f

      • long-term strategies for, 5–8

      • macroeconomic indicators, 69t

      • medium-term strategies to promote, 1, 9, 68

      • near-term strategies to promote, 1, 8–9

      • policy performance indicators and variables, 189–193t

      • product market reform outcomes, 155, 158t

      • projected outcomes of structural reforms, 171

      • reform efficiency effects on, 176, 179–181, 180f

      • regional comparison, 2f

      • regional differences in policy impacts on, 179–181, 180f, 181f

      • research needs, 188

      • sovereign debt and, 4, 5, 70, 73f, 74

      • structural reforms to increase, 87

      • tax reform to promote, 162, 162t, 163f

      • U.S. versus Europe, 5, 6f

      • See also Fiscal consolidation for public debt reduction in low-growth conditions

    H

    • Households

      • balance sheet recovery to date, 28

      • corporate balance sheet linkage, 39

      • current vulnerabilities, 22–24

      • debt, growth and, 30–31, 32

      • debt patterns within euro area, 16–17, 17f, 18f, 21–22, 21f

      • evolution of current account imbalances in Europe, 221–224, 232, 236

      • in feedback loop in balance sheet recession, 14–15, 31, 35, 39

      • historical deleveraging episodes, 27–29, 28f, 31

      • labor market reform outcomes for, 160

      • migration of debt to public sector from, 25, 26f

      • outcomes of consumption tax increase, 162

      • policies to support debt reduction of, 34

      • policy credibility among, 168–169

      • postcrisis current account, 226–227

      • prospects for recovery, 29

      • savings, 22b, 23f

    • Housing market, 21f, 22

    • Hungary, 247, 251, 253

    I

    • Iceland, 33

    • Implementation of reform challenges in, 173

      • comprehensive policy approach to, 7, 162–163

      • country-specific approach to, 7–8

      • effects of demand conditions, 170–171, 170f

      • fiscal consolidation for public debt reduction, 4–5, 9, 68, 84–85, 88

      • intra-euro area coordination, 163–166, 165t, 166t, 167t

      • role of policy credibility in, 77–79, 78f, 85, 168–169, 168f

      • short-time price stickiness in, 169–170, 169t

      • unfinished reforms in Balkans as barrier to job growth, 138–143

    • Inflation

      • public debt and, 71–74, 86–87

      • public debt reduction outcomes of fiscal consolidation and, 84

    • Information and communications technology. See Technology and globalization shocks

    • Infrastructure investment, 187, 188, 190t, 200t

    • Insolvency

      • corporate trends and vulnerabilities, 20–21

      • current regime, 20, 20f, 33

      • distance to best practices in current policies, 176

      • procedural reforms to reduce private sector debt overhang, 4, 9

      • recent regime reforms, 33

    • Interest rates

      • public debt and, 70, 71–74, 73f

      • in public debt reduction outcomes of fiscal consolidation, 82

    • International investment position, 16, 17f

    • Ireland

      • corporate balance sheets, 48

      • current account balance, 219

      • employment growth, 61, 62f

      • global financial crisis outcomes in, 39, 40

      • household balance sheets, 22, 23f

      • indebtedness in, 16–17

      • precrisis corporate debt, 45

      • public debt reduction in, 80

      • See also Euro area periphery; Greece, Ireland, Italy, Portugal, and Spain

    • Italy

      • Biagi reforms, 117

      • future challenges and opportunities, 118

      • global financial crisis outcomes in, 40–41

      • indebtedness in, 20–21

      • labor market institutions and reforms, 109–110t

      • labor market policies and outcomes, 115–116, 115–118, 116f

      • privatization experience, 85–86

      • public debt reduction experience in, 80–81

      • response to global financial crisis, 117–118

      • Treu reforms, 117

      • unemployment in, 115, 115f, 117

      • wage setting in, 115–116

      • See also Greece, Ireland, Italy, Portugal, and Spain

    J

    • Japan, 44

    K

    • Kosovo

      • labor market challenges in, 6, 125

      • unemployment benefits in, 132

      • See also Balkan economies

    L

    • Labor costs

      • in Balkan economies, 134, 135f,

      • in euro area periphery, 101

      • euro area reforms to reduce, 109

      • external competitiveness of, current account imbalance and, 230–231t 232

      • global competitiveness and, 101

      • growth of value-added exports and, 149–150

      • intra-euro area, 7, 7f, 112, 112f, 118f, 147t

      • productivity and, 134

      • reform strategies to reduce, 7, 160, 161f, 162, 163, 166, 167t tax wedges in Balkan economies, 136–138, 137f, 145

      • tax wedges in euro area, 152, 153f

      • See also Wages

    • Labor market

      • activity rates, 125–127, 126f

      • best practices policies in Europe, 176, 177–179

      • case studies of policies and outcomes, 109–110t, 109–122

      • effect of demand conditions in reforms, 170–171

      • emigration from Balkan countries, 139, 141f

      • global economic trends and, 97–98

      • growth impacts of structural reforms in, 180

      • intermediate coordination outcomes, 100

      • lessons from precrisis reform experiences, 122

      • measures of policy efficiency in, 191t

      • modeling structural reform outcomes, 152–155, 159–160, 161f, 171

      • obstacles to recovery, 5–6

      • outcomes of precrisis reforms, 105–107

      • partial equilibrium effects of policies, 103–104, 122

      • participation rates in European countries, 107f, 152, 153f

      • policy impediments to productivity gains, 100–101

      • policy variation among European economies, 101–102, 102f

      • postcrisis outcomes, 107–108, 108f

      • postcrisis structural reforms and outcomes, 151–152, 153f

      • rationale for comprehensive approach to reform, 7

      • reform credibility as outcomes factors in, 168–169, 168f

      • reform efficiency analysis, 194t

      • reform strategies for long-term growth, 6–7, 9

      • remittances and, 140–143

      • structural problems of Balkan countries, 127–128, 143–145

      • structural reforms in response to global financial crisis, 151

      • structural reforms to promote growth, 87

      • transition to long-term equilibrium, 105

      • women’s participation in, 159, 160

      • See also Duality, labor market; Employment; Labor costs

    • Latvia

      • corporate saving–investment balance, precrisis, 45

      • employment, 60

      • global financial crisis outcomes in, 39

      • See also Emerging

      • European economies with fixed exchange rates

    • Legal system

      • growth and, 179, 180–181, 188

      • measures of policy efficiency in, 189t

      • reform efficiency analysis, 198t

      • See also Insolvency

    • Lithuania. See Emerging

      • European economies with fixed exchange rates

    M

    • Migration from Balkan countries, 139, 141f

    • Minimum wage

      • in Balkan economies, 136, 137f, 147

      • labor market distortions from, 136

      • median wage and, 102f

      • purpose, 136

      • youth, 105

    • Monetary policy

      • bank lending rates, 19

      • to facilitate balance sheet adjustment, 34

      • public debt reduction outcomes of fiscal consolidation and, 82, 84, 85

      • response to global financial crisis, 2

    • Monitoring, indicators of balance sheet stress, 15–16

    • Montenegro

      • labor market challenges in, 6, 125, 145

      • strategies for promoting job growth in, 145

      • unemployment benefits in, 130, 132

      • See also Balkan economies

    N

    • Netherlands

      • corporate saving–investment balance, precrisis, 45, 48

      • household balance sheets, 24f

      • labor market outcomes of precrisis reforms, 106, 108, 122

    • New Zealand, 80

    O

    • Okun’s Law, 40f, 41n, 42f, 43f, 118

    • Organisation for Economic Co-operation and Development, 118, 151, 152

    • Outright Monetary Transactions, 2

    P

    • Patent systems, 180, 181

    • Pension reforms, 159

    • Poland

      • corporate saving–investment balance, precrisis, 48

      • global financial crisis outcomes in, 39

      • trade, 251, 253

    • Portugal

      • corporate saving–investment balance, precrisis, 45, 48

      • current account balance, 219

      • indebtedness in, 16–17, 20

      • privatization experience, 85

      • See also Euro area periphery; Greece, Ireland, Italy, Portugal, and Spain

    • Price stickiness, 169–170, 169t

    • Privatization, 85–86

    • Productivity, labor

      • convergence growth in, 99, 100f

      • corporate profit and, 52, 53f

      • effects of employment protection legislation, 159

      • growth and, 52–54, 54f

      • information and communications technology revolution and, 98

      • institutional impediments to gains in, 100

      • labor costs and, 134

      • modeling structural reform outcomes, 155–158, 157f, 158t, 160

      • spillovers of intra-euro area rebalancing, 165–166

      • trends preceding global financial crisis, 98, 98f

    • Product market(s)

      • best practices analysis of policies in Europe, 176, 177–179

      • effects of demand conditions in reform of, 171

      • measures of policy efficiency in, 191–192t

      • modeling structural reform outcomes, 152–158, 171

      • rationale for comprehensive approach to reform, 7

      • reform credibility as outcomes factors in, 168, 168f

      • reform efficiency analysis, 194t reform goals, 153

      • reforms in response to global financial crisis, 151, 152f

      • reform strategies for long-term growth, 6–7, 9

    • Public debt

      • current concerns, 67, 68–70

      • evolution of current account imbalances in Europe, 221, 224

      • future challenges, 67, 87, 88

      • growth and, 30, 32, 70

      • interest rate linkage, 70

      • international comparison, 16, 17f

      • migration of private sector debt to, 25, 26f

      • simultaneous private sector debt, 31, 35

      • trends, 25, 25f

      • variation within euro area, 16–17, 18f, 25f

      • See also Debt reduction, sovereign

    R

    • Reform efficiency modeling best practices analysis in, 175, 176–179, 177f, 178t, 179f

      • cost-benefit analysis in, 182–188, 184f, 185t, 186f, 187t

      • countries of analysis in, 173n

      • data sources, 174, 201–214t

      • findings, 188, 194–200t

      • goals of, 174

      • indices, 175–176

      • measurement of policy impacts on growth in, 176, 179–181, 180f

      • methodology, 173, 174–176

      • rationale, 173–174

      • reform gaps identified in, 176–179

      • research needs, 188

      • variables and indicators, 175, 189–193t, 202–214t

    • Remittances

      • to Balkan countries, 142–143

      • effect on labor market, 140–143

    • Research and development, 179, 180–181, 188, 193t, 197t

    • Retirement age, 101, 106, 111, 152, 170

    • Revealed comparative advantage, 252–255, 254t

    • Romania, 181

    S

    • Savings

      • corporate sector, 45–48, 46f, 47f

      • evolution of current account imbalances in Europe, 221–224, 223f, 227, 237

      • household, 2b, 23f

      • See also Balance sheet problems

    • Serbia

      • labor market challenges in, 6, 125, 132, 138, 145

      • strategies for promoting job growth in, 145

      • unemployment benefits in, 132

      • wage bargaining in, 133–134

      • See also Balkan economies

      • Service markets, 191–192t

    • Slovak Republic

      • corporate saving–investment balance in, precrisis, 48

      • employment in, 108

      • trade, 247, 251, 253

    • Slovenia, 45, 48

    • Small- and medium-sized enterprises, indebtedness in, 20–21

    • Spain

      • corporate balance sheets in, 44, 48

      • current account balance in, 219

      • employee dismissal costs in, 121

      • employment in, 108

      • global financial crisis outcomes in, 39, 40–41

      • household balance sheets in, 22, 23f, 24

      • indebtedness in, 16–17, 20

      • labor costs in, 118, 118f, 119, 119f, 122

      • labor market duality in, 120, 121, 121f

      • labor market institutions and reforms in, 109–110t

      • labor market policies and outcomes in, 118–122

      • precrisis corporate debt, 45

      • privatization experience of, 85–86

      • recommendations for supply chain linkage, 256

      • unemployment in, 118–119, 118f, 119f

      • work schedules, 120, 120f

      • See also Euro area periphery; Greece, Ireland, Italy, Portugal, and Spain

    • Stimulus spending, 2, 69, 85

    • Stock flow adjustments, public debt and, 71–72

    • Structural reforms

      • best practices analysis, 175, 176–179, 177f, 178t, 179f

      • comprehensive approach to, 7, 162–163

      • cost-benefit analysis, 182–188. See also Reform efficiency modeling

      • cost of, 182

      • country-specific approach to, 7–8

      • for debt reduction, 5

      • external environment and, 239

      • to facilitate balance sheet adjustment, 32–34

      • in fiscal consolidation, 87, 88

      • growth impacts, 179–181, 180f

      • to increase growth, 87

      • for long-term growth, 5–7

      • modeling macroeconomic variables in outcomes of, 152–166

      • obstacles to recovery, 3–4

      • postcrisis employment outcomes and, 97

      • to promote integration into global supply networks, 8

      • rationale, 171

      • research needs, 188

      • response to global financial crisis, 151

      • role of policy credibility in outcomes of, 168–169, 168f

      • shortcomings of postcrisis implementation, 151–152, 152f

      • short-term costs of, 169–170, 169t

      • spillovers of intra-euro area rebalancing, 163–166, 165t, 166t, 167t

      • strategies to promote job growth in Balkan countries, 145

      • unfinished transitions in Balkan countries, 138–143

      • See also Reform efficiency modeling

    • Sweden, 45, 181

    T

    • Taiwan, 247

    • Tax policy

      • labor market outcomes, 103–104

      • labor tax wedges, 136–138, 137f, 152

      • outcomes of consumption tax increase, 162

      • outcomes of precrisis labor market

      • reforms, 106

      • reform strategies for long-term growth, 6–7

      • revenue-neutral reform outcomes, 160–162

    • Technology and globalization shocks

      • impediments to competitive European

      • response to, 97–98, 100, 101

      • labor market duality and impact of, 104

      • labor market institutions impeding

      • response to, 100

      • labor productivity outcomes, 98, 99f, 100

      • policy responses of European economies, 97–98, 101, 122

    • Total factor productivity

      • historical growth in Europe and, 5

      • as obstacle to recovery, 5

    • Trade regulations

      • cost-benefit analysis of reform in, 187

      • measures of policy efficiency in, 193t modeling structural reform outcomes, 155

      • reform efficiency analysis, 197t

      • Trade unions, 113, 133–134

    • Trans-European Automated Real-time

      • Gross Settlement Express Transfer facility, 226–227

    U

    • Unemployment benefits

      • in Balkan economies, 129–132, 130f, 131f

      • classification of European economies by, 101–102

      • in Germany, 111

      • labor market duality and, 103, 104

      • modeling outcomes of reforms in, 159, 160

      • moral hazard risk in, 129

      • postcrisis implementation, 108–109

      • unemployment rate and, 100, 106

    • United Kingdom

      • corporate saving–investment balance, precrisis, 45

      • debt level, 16, 17f

      • labor market outcomes of precrisis reforms, 106, 122

    • United States

      • debt level, 16, 17f

      • European economic growth versus, 5, 6f

      • Home Owners Loan Corporation, 33

      • recovery from financial crisis, 28

      • technology investments, 98

    V

    • Value-added taxation, 160–162

    • Value-added trade

      • data collection shortcomings, 239, 241

      • data sources, 241–242

      • decomposition of components, 241, 242, 242f

      • determinants of growth in, 248–252, 250t

      • domestic share, 242–243, 244, 245f, 246t

      • impact on growth and employment, 240

      • recent trends, 242–244, 243f

      • revealed comparative advantage and, 252–255

      • supply link-related exports, 242, 243–244, 246–247, 247t

    • Vertical supply links

      • data collection challenges, 239

      • determinants of growth in value-added trade, 248–252

      • revealed comparative advantage and, 252–255, 254t

      • significance of, in economic recovery, 8, 239, 244, 255–256

      • structural reforms to promote, 8

    W

    • Wages

      • bargaining systems in Balkan economies, 133–134

      • employment rates correlated with adjustments in, 62

      • exchange rate and, before and after euro adoption, 98–99, 99f

      • labor market duality and, 55–56, 57f

      • labor market reform outcomes for, 160

      • lessons from current account adjustment experiences, 238

      • partial equilibrium effects of labor policies, 103–104

      • postcrisis corporate profit and, 41–44

      • postcrisis employment and, 41

      • precrisis corporate profit and, 45–48

      • rigidities in Balkan economies, 134, 136f

      • in Spain, 119, 119f, 122

      • See also Labor costs

    • World Economic Outlook, 70, 155

    Y

    • Youth unemployment, 7, 97, 122, 153f

      • in Balkan economies, 127, 128f, 132

      • in Italy, 115f, 116, 117

      • minimum wage rules and, 105, 136

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