Policy-Mix in Euroland in the New Era of Globalisation and Digital Revolution: Challenges and Priorities for the Current Decade

- Presentation speakers
  - Andrei Radulescu, Transylvania Bank and Romanian Academy, Bucharest, Romania
Abstract:

The Euroland economy continued the deceleration process in 2019 (growth pace of 1.2% YoY in 3Q, the slowest since the beginning of the post-crisis cycle in 2013), an evolution determined by the global trade tensions and the regional challenges. In this context we mention the deterioration of the total productivity factor and the diminishing impact of the unprecedented on the real economy of the expansionary monetary policy implemented by the European Central Bank. Furthermore, the core of the European Union lost the status of the equilibrium point of an unbalanced global economy, as the nominal GDP was outpaced by China in 2019. In this paper we apply standard econometric tools and use the Eurostat database (annual data) in order to estimate the contribution of the production factors to the dynamics of the potential GDP in Euroland and to identify the priorities for the regional policy-mix during this decade. The results point out the importance of rebalancing the policy-mix, with a focus on the acceleration of the implementation of the Digital Revolution, the development of the capital markets and the improvement of trade and investments with emerging countries in Asia (China and India included).