Monetary Policy and the Economy Q4/14

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• Monetary Policy and the Economy Q4/14 (PDF, 844 kB) December 2014.

Studies and Analyses

• Growth Remains Weak in 2015 – Economic Outlook for Austria from 2014 to 2016 (December 2014) (PDF, 431 kB) Fenz, Schneider. Fenz, Schneider – Monetary Policy and the Economy Q4/14 en Dec 31, 2014, 12:00:00 AM

• A Common European Unemployment Insurance – A Much Debated Route toward European Fiscal Union (PDF, 294 kB) Beer, Köhler-Töglhofer, Stiglbauer. Beer, Köhler-Töglhofer, Stiglbauer – Monetary Policy and the Economy Q4/14 The crisis has reignited a debate on deeper fiscal integration in the euro area. The goal is to improve the capability of the currency union to cope with asymmetric shocks. One instrument in this context is the implementation of a European unemployment insurance (EUI) scheme aiming at automatic stabilization of income and aggregate output in countries affected by adverse macroeconomic shocks and rising unemployment. Recently, a number of proposals
  and estimates of the economic effects of such a scheme have been published. The empirical analyses indicate a non-negligible stabilization effect of an EUI. However, an EUI is likely to face several problems originating, among other things, from structural differences in labor markets and potential moral hazard by Member States. An EUI therefore does not appear to be the most appropriate approach to increasing common risk sharing. en Automatic stabilization, unemployment insurance, monetary union, fiscal union E63, F45, H55, J65 Jan 27, 2015, 12:00:00 AM

• Bitcoin – The Promise and Limits of Private Innovation in Monetary and Payment Systems (PDF, 226 kB) Weber. Beer, Weber – Monetary Policy and the Economy Q4/14 A private initiative that has created a virtual currency and a payment system based on cryptography and decentralized management, Bitcoin is considered not only an interesting,
  but also a disruptive technical innovation by many observers. A number of regulatory and supervisory bodies have issued assessments of the phenomenon, contributing to an emerging
  international discussion. Does Bitcoin’s claim to provide useful monetary and payment services hold up when checked against principles of monetary theory and the economics of payment
  systems? We find that while Bitcoin does not rival the established money and payment systems in their traditional domains, a complementary function is conceivable in niches. Using the
  Bitcoin network poses several risks to customers, however. Since this network and financial services related to bitcoins are not regulated, costumers must take appropriate technical
  measures to protect their bitcoin holdings. In case of error and fraud, payments are difficult to reverse. Furthermore, the significant exchange rate fluctuations could pose a grave risk to
  bitcoin owners’ wealth and discourage widespread use for monetary purposes. In a nutshell, at present, bitcoins can be regarded as speculative assets, and the Bitcoin network might inspire
  further innovation in payment systems and other applications. en E42, E52, E58 Jan 27, 2015, 12:00:00 AM