1. Structural Reforms and Macroeconomic Policy
Gustav A. Horn
IMK
Macroeconomic Policy Institute

2. Basic Hypothesis
Structural Reforms must be embedded in an appropriate macroeconomic policy
What are structural reforms ?
What is the macroeconomic environment ?
Supply or Demand ?

3. Some Simulations Structural Reforms in Germany
Agenda 2010 as planned in 2003
Health care system
Pensions scheme
Unemployment benefits
Labour market Agency

4. Some Simulations Different scenarios Structural reforms Tax reform
Higher investment

5. Some simulations GDP deviations from Baseline in % Higher Investment
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5 I
2004 II
III IV
2005
2006
Higher Investment
Tax Reform
Structural Reform
GDP deviations from Baseline in %

6. Some Simulations Real Private Consumption D Tax Reform
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5 I
2004 II
III IV
2005
2006
Higher Investment
Tax Reform
Structural Reform

7. Some Simulations Unit labour Costs Higher Investment Tax Reform
-2,5
-2,0
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5 I
2004 II
III IV
2005
2006
Higher Investment
Tax Reform
Structural Reform

8. Some Simulations Available Income Tax Reform Higher Investment
-2,0
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5 I
2004 II
III IV
2005
2006
Structural Reform
Tax Reform
Higher Investment

9. Some Simulations Employees
Quelle: Simulation mit dem Deutschlandmodul des EBC-Modells
des DIW Berlin.
DIW
Berlin 2003
-0,6
-0,4
-0,2
0,0
0,2
0,4 I
2004 II
III IV
2005
2006
Higher Investment
Tax Reform
Structural Reform