Haliassos, M. (2014) “The Fiscal Crisis as a Crisis in Trust“, Goethe University Frankfurt, Center for Financial Studies and SAFE, Frankfurt: 12 Μαΐου.   The sources of the fiscal crisis have been different, but the prescribed measures amount to two: achieve budget surpluses to start reducing the size of the debt, and undertake the necessary reforms to create or boost the productive base, so as to make repayment of the …Read More

Darvas, Z. & Pia Hüttl, P. (2014) “Despite lower yields, euro-periphery is not yet out of the woods – while the public debt ratio is expected to fall, the debt trajectory remains highly vulnerable to negative growth, primary balance and interest rate shocks“, Working Paper – European Macroeconomics, Bruegel Association, 18 Ιουνίου.   Following Ireland, Portugal has also exited its financial assistance programme in a clean way, namely without any …Read More

Hendry, F. D., Mizon, E. G. (2014) “Why DSGEs crash during crises“, VoxEU Organisation, 18 Ιουνίου.   Many central banks rely on dynamic stochastic general equilibrium models – known as DSGEs to cognoscenti. This column – which is more technical than most Vox columns – argues that the models’ mathematical basis fails when crises shift the underlying distributions of shocks. Specifically, the linchpin ‘law of iterated expectations’ fails, so economic …Read More