Ad van Riet - Academia.edu (original) (raw)

Other by Ad van Riet

An interesting conference on a hot topic in perilous times. Ivan Rubinic and I will be presenting... more An interesting conference on a hot topic in perilous times. Ivan Rubinic and I will be presenting the paper "Estimating Causality Between Trade and Budget balances, Fiscal Expansion, and Austerity"

Papers by Ad van Riet

Economia politica, Mar 9, 2024

Common public debt in Europe is on the rise. Could it open a new chapter in fiscal integration? O... more Common public debt in Europe is on the rise. Could it open a new chapter in fiscal integration? Over the past 15 years it has gained in prominence to provide collective funds for financial assistance and investment projects to meet common objectives, in particular when national budgets were stretched. This article reviews how the political focus of the Member States on keeping the financial position of the European Union (EU) under tight control has given way to large-scale common public debt issuance as the logical but still exceptional response to a crisis, pandemic, or war that demands collective action. To open a new chapter in fiscal integration, Member States will need to grant the EU a permanent option to borrow capital within pre-defined limits as well as a standing source of tax revenues for fulfilling its stabilisation, redistribution, and allocation functions. A central fiscal capacity with a permanent role for common public debt in turn requires effective central fiscal surveillance to secure sound national public finances.

Edward Elgar Publishing eBooks, Feb 13, 2024

Economia Politica, 2024

Handbook of Regional Cooperation and Integration (P. de Lombaerde, editor), 2024

This chapter reviews the merits and achievements of regional monetary integration, focusing on th... more This chapter reviews the merits and achievements of regional monetary integration, focusing on the experiences of the four multilateral currency unions that are in operation across the world, namely the European Economic and Monetary Union, the Central African Economic and Monetary Community, the West African Economic and Monetary Union, and the Eastern Caribbean Currency Union. The purpose of this comparison is to highlight the economic challenges facing the member countries of a multilateral currency union and the required regional governance framework to make the centralisation of their monetary sovereignty a success, taking account of the applicable external exchange rate regime. The main conclusion is that regional monetary integration must comprise a strong political commitment to sustain the cohesion and stability of a multilateral currency union and, in case the single currency is pegged to an external anchor currency, to support the credibility of the exchange rate parity.

Social Science Research Network, 2015

Responding to the euro crisis, European leaders have put in place an enhanced economic and financ... more Responding to the euro crisis, European leaders have put in place an enhanced economic and financial governance framework for the euro area, including the main pillars of a banking union, while they have initiated work on a capital markets union. This should more effectively secure sound national macroeconomic and fiscal policies, a healthy financial sector and the stability of the euro. This paper poses the question whether the status quo of halfway political integration is sufficient to safeguard the cohesion and integrity of the euro area. National governments still have considerable leeway to circumvent the "hard" budget constraint and the strong market competition implied by the euro area's "holy trinity" (one market, one currency and one monetary policy). For example, they might target captive sovereign debt markets or take protectionist measures. This economic nationalism would entrench the crisis-related fragmentation of the single market and frustrate the efficient functioning of the monetary union. A higher level of market-preserving fiscal federalism could prevent member countries from encroaching on markets and foster sustainable economic convergence towards an optimal currency area.

Social Science Research Network, 2016

Since the global financial crisis of 2008 European authorities have set out to strengthen financi... more Since the global financial crisis of 2008 European authorities have set out to strengthen financial governance in order to create a more stable and resilient financial system. As discussed in this paper, the new and updated EU legislation addressed at a wide array of financial markets and institutions also significantly broadened the scope of the existing preferential regulatory treatment of sovereign bonds and introduced new funding privileges for governments. The many regulatory incentives for investors to buy and hold (domestic) government debt facilitate public debt management, at the cost of crowding out private sector funding and raising financial stability concerns every time the government faces distress. Moreover, a privileged access to capital markets reduces market discipline and may lead to moral hazard on the part of sovereigns. The growing scope of these government funding privileges in EU financial law may be interpreted in three (complementary) ways: as a revival of financial repression in a modern prudential guise to reduce the burden of high public debt, as a return to the traditional close relationship between the government and the financial sector so as to align mutual interests in fiscal and financial stability, or as a way to increase explicit and implicit taxes on finance and recoup public revenues lost during the financial crisis. The preferential treatment of sovereign exposures and governments' market access is found in a growing body of EU financial law. Regulatory efforts to reduce it would have to be coordinated at the international level, take account of the financial structure and allow for a (long) period of transition to avoid market disruption.

Social Science Research Network, 2016

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Social Science Research Network, 2006

Structural reforms and the European macroeconomic policy regime ■ Monetary policy and structural ... more Structural reforms and the European macroeconomic policy regime ■ Monetary policy and structural reforms in the euro area-Ad Van Riet ■ Potential output: A questionable concept-Gustav Horn ■ The Stability and Growth Pact: Stability without growth?-Cathérine Mahieu and Henri Sterdyniak ■ The euro area drifting apart-Jörg Bibow ■ Labour market re-regulation in the UK-Richard Exell Order form / 3 PART 3 Structural reforms and the european macroeconomic policy regime PART 3 / 55 PART 3 Structural reforms and the european macroeconomic policy regime Ad van Riet 1 1 Head of the EU Countries Division, Directorate General Economics, European Central Bank. The original presentation at the ETUC conference on 21-22 March 2006 was prepared with valuable input from Nadine Leiner-Killinger and Roger Stiegert. Comments on this written contribution from Hans-Joachim Klöckers, Klaus Masuch, Victor López and Giovanni Vitale are greatly appreciated. The views expressed in this contribution do not necessarily reflect those of the EC 2 See ECB (2004a) for a general overview of the characteristics of the monetary policy of the ECB. PART 3: Structural reforms and the european macroeconomic policy regime / 59 6 See e.g. ECB (2001) and Martin et al. (2005), which take a closer look at the case of network industries.

Social Science Research Network, Nov 1, 2013

The Economists' Voice, Jun 21, 2023

The 30 years old Maastricht Treaty on European Union (EU) is based on the political vision that a... more The 30 years old Maastricht Treaty on European Union (EU) is based on the political vision that a stable euro requires sound budgetary policies and sustainable public finances in all the participating countries. This article reviews how the European framework for managing sovereign risk in the Economic and Monetary Union (EMU) has evolved in challenging times. The main finding is that over the years European policymakers have applied a range of special provisions contingent on the state of national economies, the demand for public investment, the need for a sound financial system, the effectiveness of monetary transmission, or on general concerns with the integrity of the eurozone, in a way which hampers fiscal discipline. The growing prominence of this state-contingent governance could mark the political transition from the Maastricht Treaty’s focus on public risk reduction to a ‘Next Generation EMU’ which favours public risk sharing. The challenge in designing the future EMU architecture will be to balance the need to preserve the integrity of eurozone with the need for fiscal discipline.

Jahrbucher Fur Nationalokonomie Und Statistik, Mar 26, 2019

This article reviews how the European Central Bank (ECB) implemented its monetary policy for the ... more This article reviews how the European Central Bank (ECB) implemented its monetary policy for the euro area from 1999 to 2018 from two perspectives. Taking a Keynesian point of view, the euro area economy was beset for a long time by secular stagnation and required the ECB to ensure a protracted period of relatively low interest rates to provide continuous support to aggregate demand at the level of the Economic and Monetary Union (EMU). By contrast, the Austrian School of Economics argues that the low-interest rate bias of the ECB caused financial excesses and prevented a more rapid reallocation of unviable resources necessary for a sustainable expansion of aggregate supply. Both the Keynesian and the Austrian paradigm appear relevant when examining the monetary and financial aspects of the euro area business cycle and the secular decline of interest rates over the past 20 years. For most of the time, ECB monetary policy was the 'only game in town' and the EMU architecture was unable to deliver the balanced macroeconomic and financial policy mix required for a sustainable path of the euro area economy.

International Journal of Financial Studies, Apr 7, 2017

Starting in June 2014, the European Central Bank (ECB) stepped up its monetary accommodation in o... more Starting in June 2014, the European Central Bank (ECB) stepped up its monetary accommodation in order to counter a too prolonged period of low inflation in the euro area. This article offers a narrative of the monetary policy measures taken up to December 2016 and a review of the effects of ultra-low interest rates. The exceptional monetary stimulus transmitted to the economy broadly as intended. Moreover, it enhanced the financial capacity of economic agents to bear risks. At the same time, the ECB and the European micro-and macro-prudential authorities remained watchful of the unintended side-effects of an extended period of very low or negative interest rates for financial intermediation, financial stability and market discipline and took preventive or corrective measures as appropriate. A joint plan of action carried out by the 19 member countries with the aim to speed up balance sheet repair, accelerate the economic recovery and achieve higher productivity growth could have contributed to a more effective euro area macroeconomic and financial policy mix.

Social Science Research Network, 2006

1 ECONOMIC IMPACT OF SERVICES MARKET COMPETITION 8 1.1 Macroeconomic rationale and taxonomy 8 1.1... more 1 ECONOMIC IMPACT OF SERVICES MARKET COMPETITION 8 1.1 Macroeconomic rationale and taxonomy 8 1.1.1 Definition and types of competition 8 1.1.2 The effects of services sector competition on productivity and prices: the economic theory 9 1.2 Selective literature review 11 2 LABOUR PRODUCTIVITY AND INFLATION IN THE SERVICES SECTOR 16 2.1 Macroeconomic importance of the services sector 16 2.1.1 The shift to services 16 2.1.2 The drivers of the shift to services 19 2.2 Key facts regarding labour productivity and inflation in the services sector 20 2.2.1 Labour productivity 21 2.2.2 Value added price changes 25 2.2.3 Consumer price (HICP) developments in the services sector 25 3 MARKET STRUCTURE AND THE DEGREE OF COMPETITION IN SELECTED SERVICES SECTORS 33 3.1 Definition and characteristics of selected services sectors 34 3.2 Proxies of services sector competition: a taxonomy 35 3.3 Proxies of services market competition: main developments and key facts 40 3.3.1 Proxies measuring corporate profitability 40 3.3.2 Proxies measuring the degree of regulation and openness 41 3.3.3 Proxies capturing market structure 45 4 THE EMPIRICAL LINK BETWEEN SERVICES MARKET COMPETITION, LABOUR PRODUCTIVITY GROWTH AND VALUE ADDED PRICE CHANGES 4.1 Introduction 4.2 Specification of the estimated equations 4.2.1 Labour productivity growth 4.2.2 Value added price changes 4.3 Pooled regressions 4.4 Wholesale and retail trade 4.5 Hotels and restaurants 4.6 Transport and storage 4.7 Post and telecommunications 4.8 Real estate, renting and business activities 4.9 Conclusions

Social Science Research Network, 2023

Routledge eBooks, Jan 24, 2022

Social Science Research Network, 2020

Finance and society, May 6, 2023

European financial regulation consistently gives governments privileged access to private investo... more European financial regulation consistently gives governments privileged access to private investors, reflecting the anchor role assigned to sovereign securities as safe and liquid assets for the financial system. Legislative reforms after the financial crisis of 2008 further expanded the preferential treatment of sovereign securities as zero-risk claims, introduced portfolio requirements in favour of public debt, and constrained market speculation against governments. These sovereign privileges appear counterproductive for fiscal discipline and financial stability: they encourage excessive public debt issuance and make financial institutions holding government bonds-in particular from euro area countries with a variable risk profile-vulnerable to fiscal turbulence. Governments seem to have a conflict of interest. On the one hand, they are prudential regulators of financial risk-taking, on the other hand, they tend to overlook the financial sector's exposure to sovereign risk. This article considers four theories of the state-finance nexus and their solutions to this conflict of interest. The money view, the franchise view, and the modern financial repression view draw on the state's monetary and regulatory powers over finance to confirm sovereign safety. Their positions fundamentally contrast with the neoliberal view, which relies on free markets to enforce sustainable public finances. The article concludes that sovereign privileges present a fundamental dilemma for European financial governance with a neoliberal orientation: they oblige private investors to hold public debt, while weakening the role of markets in promoting fiscal discipline as the very foundation of sovereign safety.

Social Science Research Network, 2010

Introduction 12 2.2 Public interventions to support the fi nancial sector 13 2.3 The net fi scal ... more Introduction 12 2.2 Public interventions to support the fi nancial sector 13 2.3 The net fi scal costs of bank support 17 2.4 Conclusions 21 3 EURO AREA FISCAL POLICIES: RESPONSE TO THE ECONOMIC CRISIS 2 2 by António Afonso, Cristina Checherita, Mathias Trabandt and Thomas Warmedinger 3.1 Introduction 22 3.2 The fi scal impulse for the euro area economy 22 3.3 Effectiveness of a fi scal impulse 29 3.4 Conclusions 34 4 EURO AREA FISCAL POLICIES AND THE CRISIS: THE REACTION OF FINANCIAL MARKETS 3 5 by Maria Grazia Attinasi, Cristina Checherita and Christiane Nickel 4.1 Introduction 35 4.2 The fi nancial market reaction from July 2007 until September 2009 35 4.3 The determinants of government bond yield spreads in the euro area 39 4.4 Conclusions 42 5 THE CRISIS AND THE SUSTAINABILITY OF EURO AREA PUBLIC FINANCES 44 by Maria Grazia Attinasi, Nadine Leiner-Killinger and Michal Slavik 5.1 Introduction 44 5.2 Risks to fi scal sustainability 46 5.3 Government debt scenarios 49 5.4 Conclusions 53 6 EURO AREA FISCAL POLICIES: EXIT FROM THE CRISIS MODE 5 6 by Philipp Rother and Vilém Valenta 6.1 Introduction 56 6.2 Fiscal exit and consolidation strategies 56 6.3 Crisis-related challenges for the EU fi scal framework 60 6.4 Conclusions 67 7 EARLY LESSONS FROM THE CRISIS 6 8 by Ad van Riet REFERENCES 70 EUROPEAN CENTRAL BANK OCCASIONAL PAPER SERIES SINCE 2008 78 LIST OF BOXES: Box 1 The statistical recording of public interventions to support the fi nancial sector 16 by Julia Catz and Henri Maurer Box 2 The fi scal costs of selected past banking crises 19 by Maria Grazia Attinasi Box 3 Fiscal developments in past systemic fi nancial crises 26 by Vilém Valenta Box 4 The determinants of sovereign bond yield spreads in the euro area: an empirical investigation 40

Economia politica, Mar 9, 2024

Edward Elgar Publishing eBooks, Feb 13, 2024

Economia Politica, 2024

Handbook of Regional Cooperation and Integration (P. de Lombaerde, editor), 2024

Social Science Research Network, 2015

Social Science Research Network, 2016

Social Science Research Network, 2006

Social Science Research Network, Nov 1, 2013

The Economists' Voice, Jun 21, 2023

Jahrbucher Fur Nationalokonomie Und Statistik, Mar 26, 2019

International Journal of Financial Studies, Apr 7, 2017

Social Science Research Network, 2006

Social Science Research Network, 2023

Routledge eBooks, Jan 24, 2022

Social Science Research Network, 2020

Finance and society, May 6, 2023

Social Science Research Network, 2010

Other publications TiSEM, 2018

6 4.3 Managing the supply of government debt in euro area countries 4.3.1 New challenges for fund... more 6 4.3 Managing the supply of government debt in euro area countries 4.3.1 New challenges for funding the government 4.3.2 Attuning public debt supply to domestic audiences and switching to longer tenors 4.3.3 Other innovations in managing public debt supply 4.3.4 Public debt supply at ultra-long maturities 4.4 Managing the demand for government debt in euro area countries 4.4.1 Selected cases of financial repression by euro area countries 4.4.2 Imposing mandatory loans and capital levies? 4.5 Assessment and conclusion 4.6 References 5. The privileged treatment of public debt in European finance 5.1 Introduction 5.2 Financial reform turning into financial repression? 5.3 Government funding privileges in European finance 5.3.1 Crisis prevention measures 5.3.2 Crisis management measures 5.3.3 Crisis resolution measures Box 5.1-Bank supervision, recovery and resolution in the European Banking Union 5.4 A composite index of government funding privileges in EU prudential law 5.4.1 European financial reforms: de jure application and de facto anticipation 5.4.2 Financial repression indices in the literature 5.4.3 Construction of the European index of government funding privileges 5.4.4 The rising trend of government funding privileges in EU prudential law since 2008 Annex-The scoring of government funding privileges 5.5 Assessment and conclusion Box 5.2-Keeping government bonds in national hands 5.6 References 6. Monetary policy and the secular decline of interest rates in the euro area 6.1 7 6.4 The secular decline of interest rates: the financial repression view 6.4.1 The origin of the financial repression view and forced saving 6.4.2 Financial repression, forced saving and the equilibrium (real) interest rate 6.4.3 A new age of financial repression and forced saving 6.4.4 How to secure a sustainable recovery after the crisis? 6.5 Targeting interest rates and managing the yield curve for monetary policy 6.5.1 The economic rationale of pegging interest rates Box 6.1-Financial repression and interest rate targeting in the United States 6.5.2 The core principles of monetary policy in open markets 6.5.3 The short-term interest rate as an operational target for monetary policy 6.6 Central bank interventions in public and private debt markets 6.6.1 A new style of central banking 6.6.2 The Bank of Japan leading the way 6.6.3 Managing the term structure of government bond yields 6.6.4 Managing the sovereign yield curve in the special case of the euro area 6.7 ECB monetary policy and the secular decline of interest rates in the euro area

Macroeconomic imbalances and risks to financial stability, 2014

Foreword Vitor Constancio 1. Introduction and Overview Bernhard Winkler, Ad van Riet and Peter Bu... more Foreword Vitor Constancio 1. Introduction and Overview Bernhard Winkler, Ad van Riet and Peter Bull PART I: FLOW OF FUNDS AND MACROFINANCIAL ANALYSIS 2. Tobin LIVES John Duca and John Muellbauer 3. Balance sheets in The Great Moderation Richard Barwell and Oliver Burrows 4. Japan's Flow of Funds Accounts Shuji Kobayakawa and Ryoichi Okuma 5. Financial Accounts - the Case of Slovenia Janez Fabijan PART II: FLOW OF FUNDS AND MACROECONOMIC IMBALANCES IN EUROPE 6. The Financial Crisis in the Light of Euro Area Accounts Philippe de Rougemont and Bernhard Winkler 7. The Surveillance of Macroeconomic Imbalances in the EU Carlos Cuerpo and Alexandr Hobza 8. Debt, Assets and Imbalances in the Euro Area Christophe Van Nieuwenhuyze PART III: FLOW OF FUNDS AND FINANCIAL STABILITY 9. Systemic Risk Contingent Claims Analysis Nuno Silva, Nuno Ribeiro and Antonio Antunes 10. Financial Accounts and Financial Stability in Lithuania Virgilijus Rutkauskas 11. Financial Linkages of the Financial Sec...

Money, Credit and Sectoral Balance Sheets, 2013

Any person who does any unauthorized act in relation to this publication may be liable to crimina... more Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

Money, credit and sectoral balance sheets, 2014

Foreword Peter Praet 1. Money, Credit and the Flow of Funds in Monetary Policy Bernhard Winkler, ... more Foreword Peter Praet 1. Money, Credit and the Flow of Funds in Monetary Policy Bernhard Winkler, Ad van Riet and Peter Bull PART I: MONEY, CREDIT AND LIQUIDITY IN THE FLOW OF FUNDS 2. The Quantity Theory of Money and the Flow of Funds Carmelo Salleo 3. The Quantity Theory of Credit and Some of its Policy Implications Richard Werner 4. Euro Area Money Demand and International Portfolio Allocation Roberto A. De Santis, Carlo A. Favero and Barbara Roffia 5. Global Liquidity and Credit Booms Claudio Borio, Robert McCauley and Patrick McGuire 6. Dual Liquidity Crises Ulrich Bindseil and Adalbert Winkler 7. Determinants and Consequences of Credit Tightening Riccardo De Bonis, Luigi Infante and Francesco Paterno PART II: SECTORAL ANALYSIS OF THE FLOW OF FUNDS 8. Financial Intermediary Balance Sheet Management Tobias Adrian and Hyun Song Shin 9. Bank Leverage and the Credit Cycle in the Euro Area Celestino Giron and Silvia Mongelluzzo 10. Households' Financial Portfolio Choices S. Avouy...

Palgrave Macmillan eBooks, Nov 29, 2013