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The recent surge in energy prices in Europe and their high volatility, have a very large impact on its economy. Policymakers have sought to counteract the impacts of the unprecedented energy price shock with a plethora of measures albeit with limited success. This paper proposes a dynamic, flexible system of energy price regulation at the retail level. The mechanism is simple, automatic and has a number of parameters that can be adjusted to fine tune its execution. It is shown how the mechanism leads to toppling of energy prices and reduces their volatility. At the same time, it does not prevent energy prices to absorb long-run fundamental/ market-conform price trends. [ABSTRACT FROM AUTHOR]

This paper develops and estimates a small macroeconomic model of the Russian economy. The model is tailored to analyse the impact of the oil price, the exchange rate, private sector confidence and fiscal policy on economic performance. Simulations suggest that the Russian economy is vulnerable to downward oil price shocks. We substantiate two mechanisms that mitigate the economic effects of oil price shocks, namely the stabilisation brought by the Oil Stabilisation Fund and the Dutch disease effect. The fiscal policies of the Putin administration temper economic fluctuations caused by oil price shocks. doi:10.1057/ces.2009.2 Keywords: Russia, oil price, macroeconomic modelling, Oil Stabilisation Fund JEL Classifications: C70, E17, E58, E16, E63, INTRODUCTION Russia is the largest neighbour of the enlarged European Union (EU). The economies of the EU and Russia are increasingly integrated through rising flows of goods, services, capita! and [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpolmod.2007.05.013 Byline: Cindy Moons (a), Harry Garretsen (b)(c), Bas van Aarle (c)(d), Jorge Fornero (a)(e) Keywords: Fiscal policy; Monetary policy Abstract: This paper analyzes monetary policy in a stylized New-Keynesian model. A number of issues are focused upon: (i) optimal monetary policy under commitment or discretion versus ad-hoc monetary policy based on simple rules, (ii) the effects of fiscal policies and foreign variables on monetary policy, (iii) the effects of fiscal deficit and interest rate smoothing objectives and the role of forward-backward linkages in the model. The model is estimated for the Euro Area. Using simulations of the estimated model, it is analyzed how these aspects might affect monetary policy of the ECB and macroeconomic fluctuations in the Euro Area. Author Affiliation: (a) University of Antwerp, Department of Applied Economics, Prinsstraat 13, 2000 Antwerpen, Belgium (b) Utrecht School of Economics, Utrecht University, The Netherlands (c) CESifo, Munich, Germany (d) Department of Economics, University of Maastricht, The Netherlands (e) Europainstitut Wirtschaftsuniversitaet Wien, Althanstrasse 39-45, 1090 Wien, Austria Article History: Received 1 March 2006; Revised 1 January 2007; Accepted 1 May 2007

This paper studies the experiences with fiscal adjustments in the European Union (EU) countries during the transition period to the Economic and Monetary Union (EMU). Using several approaches suggested in the literature on fiscal adjustments and their macroeconomic effects and in the literature on EMU, we analyze the effects of the fiscal adjustments during this period on private consumption. Thereby, we also take the specific context of the transition towards EMU explicitly into consideration. At best mixed evidence for the presence of non-linearities in the relation between fiscal adjustments and private spending is obtained. The sensitivity of the results for a number of factors is also checked. JEL classification: E32; F43 Keywords: Fiscal retrenchment; EMU

This paper studies the interaction between the excessive deficits procedure of the Maastricht Treaty and the fiscal stablization policies of the Economic and Monetary Union, as well as how a fiscal transfer mechanism between members affects them.