EAGLE . یک مدل برای تجزیه و تحلیل سیاست وابستگی متقابل اقتصاد کلان در منطقه یورو

We develop a 4-region macroeconomic model of the euro area and the world economy. The model (EAGLE, Euro Area and Global Economy model) is microfounded and designed for conducting quantitative policy analysis of macroeconomic interdependence across regions in the euro area and between the euro area and the world economy. Specifically, we simulate a permanent reduction in labor tax rates in the euro area. The effects on real activity are expansionary in both the short run and long run. Implementing reforms simultaneously across regions would produce extra benefits and make the macroeconomic performance in the euro area more even.

International macroeconomic interdependence is a relevant topic in a monetary union such as the euro area, where monetary policy is set according to euro area-wide performance, while fiscal and structural policies are mainly conducted at the country level. As such, understanding the transmission mechanism of region-specific or common shocks across euro area countries and the related role of country-specific structural economic features is crucial for properly assessing the appropriate stabilization policy responses. To analyze such issues we develop a new model for the euro area, named EAGLE (Euro Area and Global Economy). It is a large-scale microfounded model for the quantitative analysis of spillovers and macroeconomic interdependence across the different countries belonging to the euro area and between them and other countries outside the monetary union. Thanks to the microfoundations, the analysis can be conducted in a fully coherent, disciplined and internally consistent framework. In this paper we calibrate EAGLE to four regions: Germany, rest of the euro area, United States (US), and rest of the world.3 Germany and rest of the euro area share, consistently with the monetary union framework, the monetary policy and the nominal exchange rate against other regions. Each region is characterized by a rich fiscal setup, consisting in public purchases and transfers, different types of tax rates (on labor and capital income, on consumption), public debt (appropriately stabilized through a fiscal rule). Moreover, EAGLE has all the features needed to realistically characterize the short-run dynamics of the adjustment to shocks (habit formation in consumption, adjustment cost on investment, sticky wages and prices à laCalvo, 1983). Finally, home bias in tradables, local currency pricing, nontradable goods and incomplete market at international level allow for a realistic international transmission of a country-specific shock through movements of trade flows and international relative prices (terms of trade and real exchange rate).4 In this paper we simulate EAGLE to assess the macroeconomic effects of one type of structural reforms, namely a permanent reduction in labor tax rate in the euro area. The reform is relevant for three reasons. First, the well known historical relatively bad performance of the European labor markets can be at least partially explained in terms of relatively high labor tax rate.5 Second, reducing distortions in the labor market can help in rising the long run potential output of the euro area.6 Third, euro area countries are highly integrated through trade and financial flows. As such, cross-country spillovers of country-specific tax reforms through changes in trade quantities and relative prices can be relevant. We run two counterfactual scenarios: in one case, we simulate a permanent and gradual reduction in Germany firms' social contributions to the levels of the US over a period of 5 years. In the second, both Germany and the rest of the euro area simultaneously reduce their corresponding firms' social contributions to the US levels. Our main results are as follows. First, there are benefits from unilaterally cutting labor wedges. A reduction in firms' social contributions in Germany by 11.5 percentage points (p.p.) would induce an increase in the long-run German output equal to 4.4%. As the tax cut is implemented gradually over a period of 5 years, the output would smoothly reach its new long-run level in 7 years. Second, cross-country coordination of reforms in the euro area would add extra benefits to each region, by limiting the deterioration of relative prices and purchasing power that a country faces when implementing reforms unilaterally. Specifically, in the long run, German output would increase by 4.7%. Third, cross-country coordination would make the macroeconomic performance of the different regions belonging to the euro area more homogeneous, both in terms of prices and real activity. Overall, results suggest that reforms implemented individually by each country in the euro area produce positive effects, cross-country coordination produces larger and more evenly distributed positive effects. Results are in line with those obtained by Coenen et al. (2008) that analyze the impact of a euro area-wide reduction in labor tax wedge using the New Area Wide Model calibrated to the euro area as a whole and to the US. Different from their contribution, we are able to characterize the multi-country dimension of the euro area and international spillovers thanks to the EAGLE setup. The paper is organized as follows. The next section describes the model setup. Section 3 reports the calibration of the model. Section 4 contains some illustrative simulations for understanding the transmission mechanisms operating in EAGLE. Section 5 reports the macroeconomic effects of reducing labor tax rates. Some concluding remarks are reported in the final section. Given that EAGLE is a relatively new model, in the Appendix A we lay down the transmission mechanism of some shocks to better characterize its main dynamic properties.

The monetary union dimension of the euro area has potentially deep implications for the transmission of shocks originating in the euro area or abroad. Spillovers related to changes in relative prices and to the common monetary policy can be sizeable, and, as a consequence, call for appropriate stabilization policy measures. This paper has outlined a model, EAGLE, aimed at analyzing these issues. Its large scale, jointly with its microfoundations, allows to properly analyze the spillovers in the euro area and to conduct a quantitative analysis in a theoretically coherent and fully consistent model setup. Specifically, in this paper we have simulated EAGLE to assess the impact of reducing firms' social contributions in the euro area. The effects, in particular on output and hours worked, are positive and sizeable, both domestically and cross-country. The effects are more evenly distributed across the euro area regions when the reforms are implemented simultaneously in each region. It would be of great interest to assess the macroeconomic impact of labor tax cuts not only in presence of nominal rigidities, as we do in this paper, but also when real rigidities characterize the labor market. As such, introducing searching frictions in the model and calibrate them to the euro area countries is the next step in the research agenda.