Every year thousands of Estonians, most of them young with low or medium-level skills, leave Estonia to find better paid work abroad. Given Estonia’s small population and low birth rate, this significant loss of workers exacerbates the challenges posed by the ageing of its population. This paper evaluates policy options to help combat this trend by making local jobs more attractive.
Categories: Public finances ; Labour markets ; Economic crisis
Series: Country Focus
The fall in energy prices has opened a window of opportunity for governments in both developed and developing countries to reform subsidy schemes for fossil fuels, which worldwide cost an estimated USD 1.9 trillion a year. Careful reforms would not only strengthen public finances but reduce economic distortions and help lower C02 emissions. This Economic Brief aims to shed some light on the true magnitude and allocation of fossil fuel subsidies so as to enable comparisons between countries and regions.
Categories: Public finances ; International economics and non-EU economies
Series: Economic Briefs
The recent crisis has shown how economic shocks can lead to considerable and persistent cyclical divergences in the euro area. Successful monetary unions have generally been backed by fiscal arrangements providing income insurance against shocks. This paper reviews the potential issues, the underlying trade-offs and the necessary theoretical conditions to make an income insurance scheme workable, and provides an empirical application for the euro area. It also discusses ‘good’ design features, arguing that such schemes should focus on large shocks and exert a moderating effect during boom times, as well as provide cushioning against adverse shocks.
Categories: Economic policy coordination ; Public finances ; The euro
The amount Spain imports has fallen considerably in recent years, but what explains this trend? To answer this question, this paper analyses the relationship between imports, relative prices and internal and external demand. It finds that although improved competitiveness has indeed helped Spain to reduce its imports, a large part of the fall has come from the decline in domestic demand. With domestic demand and imports already starting to pick up again, maintaining the reduction in imports that has been achieved will depend on continued improvements in competitiveness and less dependence on domestic demand for growth.
Categories: Structural policies, growth and development ; International economics and non-EU economies