Interpreting EU Funds Data for Macroeconomic Analysis in the New Member States
IMF Working Papers, April 1, 2007
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Bibliographic details
- Authors: Robert Sierhej, Christoph B. Rosenberg
- Published: April 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451866414.001
Summary and scope
- Drawing on a dataset suitable for macroeconomic analysis, the paper provides an overview of the magnitudes, purpose and institutional implications of EU-related transfers to and from the new member states.
- The analysis uses accounting identities and first-round effects to assess macroeconomic impacts during the first years of membership.
- The paper highlights that effects are likely to increase as additional funding become available under the new financial perspective, pointing to the need to consider policy tradeoffs.
Key quantitative findings
- EU funds may have led to a fiscal drag of up to 1 percent of GDP during the first years of membership.
- EU funds may have generated an additional aggregate demand stimulus of up to 1 percent of GDP during the first years of membership.
Analytical focus and methods
- Uses a dataset assembled for macroeconomic analysis of EU-related transfers to and from new member states.
- Employs a rough analysis of accounting identities and first-round effects to estimate fiscal and demand-side impacts.
Policy implications and considerations
- The simultaneous presence of a fiscal drag and an aggregate demand stimulus points to tradeoffs for fiscal policy makers in new member states.
- As additional funding becomes available under the new financial perspective, the magnitude of these macroeconomic effects is likely to increase, reinforcing the need to weigh policy tradeoffs when designing budgetary and fiscal responses.