Roubini, Nouriel, (2016), “The Global Economy’s New Abnormal”, Social Europe Journal, 5 February Since the beginning of the year, the world economy has faced a new bout of severe financial market volatility, marked by sharply falling prices for equities and other risky assets.A variety of factors are at work: concerns about a hard landing for the Chinese economy; worries that growth in the United States is faltering at a time …Read More
Hansen, Stephen, McMahon, Michael, (2016), “The nature and effectiveness of central-bank communication“, Voxeu, 3 February. In addition to setting interest rates, central banks also communicate with the public about economic conditions and future actions. While it has been established that communication can drive expectations, less is known about how it does so. This column attempts to shed light on this question. Applying novel measures to the content of Federal Reserve statements, it …Read More
Langfield, Sam, Pagano, Marco, (2016), “Financial structure and growth revisited”, Voxeu, 1 February Why is growth in Europe so low? Among the contributing factors, this column highlights the role of financial structure. Intermediation in Europe is heavily bank-based, and the authors’ novel empirical findings indicate that such a structure exerts a negative effect on long-run economic growth and exacerbates its response to sharp drops in real estate prices. The findings support policymakers’ efforts to rebalance …Read More
Kaletsky, Anatole, (2016), “The Three Fears Sinking Global Markets”, Social Europe Journal, 1 February January is usually expected to be a good month for stock markets, with new money gushing into investment funds, while tax-related selling abates at the end of the year. Although the data on investment returns in the United States actually show that January profits have historically been on only slightly better than the monthly norm, the widespread belief …Read More
Ruist, Joakim, (2016), “Fiscal cost of refugees in Europe”, Voxeu, 28 January The current inflow of refugees into Europe has left policymakers in disagreement over how to react. A major concern is the perceived financial burden that can result from large intakes. This column discusses the fiscal impact of refugees on the Swedish economy. The current net redistribution from the non-refugee population to refugees (excluding arrivals in 2015) is estimated to …Read More
Economist, (2016), “A Nordic laggard can yet forge ahead with reforms”, Economist, 1 February THE harbour may be frozen, but that does not stop a ferry with a few intrepid tourists on board from making its way through the ice to Suomenlinna, a former fortress and popular sight-seeing spot near Helsinki. Finns, whose country stretches from the Baltic Sea to the Arctic, are inured to hostile conditions, but their economy …Read More
Darvas, Zoslt, Merler, Sylvia, Huttl, Pia, Walsh, Thomas, (2016), “Analysis of developments in EU capital flows in the global context”, Bruegel, 28 January Free movement of capital, which is one of the four fundamental economic freedoms of the European Union, can enhance welfare if it leads to better allocation of financial and productive resources. However, it can also be a source of vulnerability, with far-reaching spillovers. Monitoring and assessing capital …Read More
Di Mauro, Filippo, Nagengast, Arne, Stehrer, Robert, (2016), “On the correction of Eurozone external imbalances and the pitfalls of bilateral imbalance measures”, Voxeu, 29 January Now the worst of the Eurozone Crisis has passed, one question that emerges is whether improving current account balances should be an objective for policymakers. And if so, what tools are available? This column argues that because of the emergence of global value chains, trade imbalances within the Eurozone …Read More
Sachs, Jeffrey, (2016), “The Global Economy’s Marshmallow Test”, Project Syndicate, 27 January The world economy is experiencing a turbulent start to 2016. Stock markets are plummeting; emerging economies are reeling in response to the sharp decline in commodities prices; refugee inflows are further destabilizing Europe; China’s growth has slowed markedly in response to a capital-flow reversal and an overvalued currency; and the US is in political paralysis. A few central …Read More
Janssen, Ronald, (2016), “Break The Vicious Circle Of Falling Prices And Wages”, Social Europe Journal, 27 January The IMF has recently released its latest World Economic Outlook (WEO) pointing to persistently weak growth and another downward revision of its projected growth rates for 2016 and 2017 by 0.2 percentage points in each year. Despite this, the IMF’s growth trajectory still sees the world economy recovering slightly from the weakness it …Read More
