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This working paper discusses what policy makers should do in order to restore balance in the Icelandic economy and lay out the foundations for a sustainable recovery.
Compulsory school education in Italy produces poor results in terms of 15-year-olds’ performance on PISA tests, compared with other OECD countries, despite a relatively high level of expenditure, as discussed in this working paper.
Japan needs a credible fiscal consolidation plan, including spending cuts and tax increases, to maintain confidence in its fiscal sustainability as gross public debt nears 200% of GDP in 2010.
Inflation performance has been unsatisfactory. By joining the euro area, Iceland would share the benefits of the ECB’s credibility. Substantial fiscal consolidation is required following the financial crisis.
This working paper suggests that restoring competitiveness will require strengthening France's growth potential and to address the main long term determinants of that potential, such as fostering R&D, promoting innovation, reducing the tax burden, boosting competition and so on.
High public debt leaves virtually no room for fiscal manoeuvre to limit the impact of the crisis in Greece. The close trade and banking links established with the Balkan countries might be a risk in the near future.
The high public debt and a large pension burden heighten the urgency to improve the efficiency of the public sector to enhance fiscal viability and restore room for manoeuvre for stabilization policy.
Despite improved fundamentals, Mexico is hit hard by the financial crisis, being exposed to several simultaneous external shocks. A welcome, but weak, stimulus was passed for 2009, and policy will likely need to be supportive also in 2010.
Fiscal policy is highly dependent on volatile oil income. The balanced budget rule can create a bias for spending oil revenues as they are earned, especially as transfers to the stabilization funds are limited by caps at low levels. This can potentially lead to a pro-cyclical bias in fiscal policy. Revenues have also been lower than they could have, if gasoline prices had adjusted with international prices instead of a price smoothing
Despite progress over the past two decades Mexico’s health and education indicators remain well below the average of the OECD and some of its Latin American emerging market peers.