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Denmark, Finland, Norway, and Sweden form a tightly integrated region which has strong ties with the euro area as well as some exposure to Russia. Using the IMF’s Global Integrated Monetary and Fiscal model (GIMF), we examine spillovers the region could face, focusing on possible scenarios from the rest of the euro area and Russia, and the fall in global oil prices. We show that the spillovers from these scenarios differ in magnitude and impact, regardless of the high degree of integration among the four Nordic economies. These differences are driven by the fact that Denmark and Finland have no independent monetary policy, and Denmark and Norway are net energy exporters while Finland and Sweden are energy importers. We infer lessons for policy from the outcomes.

Financial Risk Management --- Foreign Exchange --- Macroeconomics --- Public Finance --- General Aggregative Models: Keynes --- Keynesian --- Post-Keynesian --- General Aggregative Models: Forecasting and Simulation --- Monetary Policy --- Fiscal Policy --- Open Economy Macroeconomics --- Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation --- Energy: Demand and Supply --- Prices --- Macroeconomics: Consumption --- Saving --- Wealth --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Finance --- Currency --- Foreign exchange --- Energy industries & utilities --- Energy prices --- Consumption --- Oil prices --- Sovereign wealth funds --- Real exchange rates --- Energy pricing --- Expenditure --- National accounts --- Asset and liability management --- Economics --- Expenditures, Public --- Finland

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Germany and the Czech Republic, Hungary, Poland, and Slovakia (the CE4) have been in a process of deepening economic integration which has lead to the development of a dynamic supply chain within Europe—the Germany-Central European Supply Chain (GCESC). Model-based simulations suggest two key policy implications: First, as a reflection of strengthening trade linkages, German fiscal spillovers to the CE4 and more broadly to the rest of the euro area, have increased over time, but are still relatively small. This is explained by the supply chain nature of trade integration: final demand in Germany is not necessarily the main determinant of CE4 exports to Germany. Second, increased trade openness in both Germany and the CE4 implies a greater exposure of the GCESC to global shocks. However, owing to its strong fundamentals—including sound balance sheets and its safe haven status— Germany plays the role of a regional anchor of stability by better absorbing shocks from other trading partners instead of amplifying their transmission across the GCESC.

European Union countries --- Economic integration --- Accounting --- Exports and Imports --- Macroeconomics --- Public Finance --- Business Fluctuations --- Cycles --- Fiscal Policy --- Comparative or Joint Analysis of Fiscal and Monetary Policy --- Stabilization --- Treasury Policy --- Models of Trade with Imperfect Competition and Scale Economies --- Open Economy Macroeconomics --- International Policy Coordination and Transmission --- International Business Cycles --- Public Administration --- Public Sector Accounting and Audits --- Externalities --- Trade: General --- Debt --- Debt Management --- Sovereign Debt --- Financial reporting, financial statements --- International economics --- Public finance & taxation --- Financial statements --- Spillovers --- Fiscal stimulus --- Exports --- Public debt --- Public financial management (PFM) --- Financial sector policy and analysis --- Fiscal policy --- International trade --- Finance, Public --- International finance --- Debts, Public --- Germany

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This paper, using a six-region DSGE model of the world economy, assesses the GDP and current account implications of permanent oil supply shocks hitting the world economy at an unspecified future date. For modest-sized shocks and conventional production technologies the effects are modest. But for larger shocks, for elasticities of substitution that decline as oil usage is reduced to a minimum, and for production functions in which oil acts as a critical enabler of technologies, GDP growth could drop significantly. Also, oil prices could become so high that smooth adjustment, as assumed in the model, may become very difficult.

Chemical & Materials Engineering --- Engineering & Applied Sciences --- Chemical Engineering --- Petroleum products. --- Economic geography. --- Geography, Economic --- World economics --- Mazut --- Geography --- Commercial geography --- Petroleum --- Hydraulic fluids --- Refining --- Petroleum products --- Energy consumption --- Prices&delete& --- Econometric models --- E-books --- Consumption of energy --- Energy efficiency --- Fuel consumption --- Fuel efficiency --- Power resources --- Energy conservation --- Prices --- Investments: Energy --- Macroeconomics --- Economic Theory --- Industries: Energy --- Bayesian Analysis: General --- Forecasting and Other Model Applications --- Nonrenewable Resources and Conservation: Demand and Supply --- Exhaustible Resources and Economic Development --- Energy: General --- Energy: Demand and Supply --- Price Level --- Inflation --- Deflation --- Agriculture: Aggregate Supply and Demand Analysis --- Macroeconomics: Production --- Investment & securities --- Economic theory & philosophy --- Petroleum, oil & gas industries --- Oil --- Oil prices --- Price elasticity --- Demand elasticity --- Oil production --- Commodities --- Economic theory --- Production --- Petroleum industry and trade --- Elasticity --- Economics --- United States

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Wide-ranging structural reforms are underway in Italy, aimed at addressing key bottlenecks in the product and labor markets. Our analysis, based on the IMF‘s Global Integrated Monetary and Fiscal model (GIMF), attempts to quantify the potential gains to the economy from a comprehensive package of structural reforms. We find that these gains can be sizeable. While in most cases, the reforms go in the right direction, their impact would depend on effective and timely implementation. In some areas, especially in the labor market, reforms would benefit from further strengthening. The priorities should be to strengthen competition in the non-tradable sector and make the labor market more efficient and inclusive, supported by growth-friendly fiscal reforms.

Structural adjustment (Economic policy) --- Deregulation --- Competition --- Labor market --- Industries --- Regulatory reform --- Industrial policy --- Trade regulation --- Economic policy --- Law and legislation --- E-books --- Finance: General --- Labor --- Macroeconomics --- Forecasting and Other Model Applications --- General Aggregative Models: Keynes --- Keynesian --- Post-Keynesian --- Forecasting and Simulation: Models and Applications --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Fiscal Policy --- Fiscal Policies and Behavior of Economic Agents: Household --- Fiscal Policies and Behavior of Economic Agents: Firm --- Institutions and Growth --- Measurement of Economic Growth --- Aggregate Productivity --- Cross-Country Output Convergence --- Labor Economics Policies --- General Financial Markets: General (includes Measurement and Data) --- Demand and Supply of Labor: General --- Labor Economics: General --- Wages, Compensation, and Labor Costs: General --- Labour --- income economics --- Finance --- Labor market reforms --- Commodity markets --- Labor markets --- Wages --- Financial markets --- Manpower policy --- Commodity exchanges --- Labor economics --- Italy

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Given the backdrop of pressing infrastructure needs, this paper argues that higher German public investment would not only stimulate domestic demand in the near term and reduce the current account surplus, but would also raise output over the longer-run as well as generate beneficial regional spillovers. While time-to-build delays can weaken the impact of the stimulus in the short-run, the expansionary effects of higher public investment are substantially strengthened with an accommodative monetary policy stance—as is typical during periods of economic slack. The current low-interest rate environment presents a window of opportunity to finance higher public investment at historically favorable rates.

Public investments --- Monetary policy --- Fiscal policy --- Government investments --- Investments, Public --- Expenditures, Public --- Investments --- Capital budget --- Economic development projects --- Investment of public funds --- Finance --- Germany --- Economic conditions. --- Foreign Exchange --- Macroeconomics --- Money and Monetary Policy --- Public Finance --- Monetary Policy --- Fiscal Policy --- Open Economy Macroeconomics --- International Policy Coordination and Transmission --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Externalities --- Public finance & taxation --- Monetary economics --- Currency --- Foreign exchange --- Public investment spending --- Fiscal stimulus --- Accommodative monetary policy --- Real effective exchange rates --- Spillovers --- Expenditure --- Financial sector policy and analysis --- International finance