Review of the Franco-German Fiscal Policy Seminar 2021

On 9 and 10 November, the Franco-German Fiscal Policy Seminar was held, jointly organised by the German Federal Ministry of Finance and the French Treasury. This annual seminar aims to establish links between the world of academic research and public policy makers. This year's theme was "One year through the COVID-19 crisis".

The objective of this seminar is to present and discuss cutting-edge research in order to improve understanding of the economic mechanisms at work during and especially after the pandemic, and to inform public decision-makers on the appropriate responses, particularly in a Franco-German context which benefits from a common knowledge base.

The seminar was organised around five sessions (i) the impact of the crisis on covid, (ii) the debt burden, (iii) sovereign interest rates, (iv) fiscal stabilisation and (v) strengthening the resilience of the economic and monetary union. These sessions were preceded by a keynote lecture on the anatomy of the global savings glut by Mortiz Schularick (Sciences Po and University of Bonn), with the seminar being opened by Agnès Bénassy-Quéré (French Treasury and Paris School of Economics) and Jakob von Weizsäcker (German Federal Ministry of Finance).

14 papers were presented by their authors during this seminar. These papers were selected, via a call for papers, by the members of the Scientific Committee of the seminar.

+ The full report (in french) >>

Why a Franco-German seminar ?

• Agnès Bénassy-Quéré (French Treasury & Paris School of Economics)
• Jakob von Weizsäcker (German Federal Ministry of Finance).

Keynote

• Mortiz Schularick (Sciences Po and University of Bonn)

Session 1 - The covid crisis unfolding

• Causal effects of closing businesses in a pandemic : Presentation - Discussion
• Supply shocks in supply chains: Evidence from the early lockdown in China : Presentation - Discussion
• From Macro to Micro: heterogeneous exporters in the Pandemic : Presentation - Discussion
  

Session 2 - Debt overhang

• The Debt Capacity of a Government : Presentation - Discussion
• Breakup and Default Risks in the Great Lockdown : Presentation - Discussion

Session 3 - Sovereign interest rates

• The Liquidity Channel of Fiscal Policy : Presentation - Discussion
• Dispelling the Shadow of Fiscal Dominance? Fiscal and Monetary Announcement Effects for Euro Area Sovereign Spreads in the Corona Pandemic : Presentation - Discussion
• Do Fundamentals Explain Differences between Euro Area Sovereign Interest Rates? : Presentation - Discussion

Session 4 - Fiscal stabilization 

• Does tax policy work when consumers have imperfect price information? Theory and evidence : Presentation - Discussion
• What are the price effects of temporary VAT Changes ? Evidence from Germany : Presentation - Discussion
• Should We Insure Workers or Jobs During Recessions? : Presentation - Discussion

Session 5 - Strengthening the resilience of the EMU to future shocks

• The Effects of Government Spending in the Eurozone : Presentation - Discussion
• Monetary-Fiscal Crosswinds in the European Monetary Union : Presentation - Discussion
• Conditionality in Official Lending: Compliance through Strategic Assessment : Presentation - Discussion

Crédits photo : Ludovic Suttor-Sorel