Caicedo, Santiago, Lucas, Robert E., Jr., Rossi-Hansberg, Esteban, (2016), “Learning, career paths, and the distribution of wages”, Voxeu, 14 Μαΐου A large part of people’s wages rewards the knowledge embedded in them that they use in a production endeavour. Knowledgeable individuals specialise in hard, complicated tasks, while less knowledgeable ones specialise in simpler, more common tasks. This column uses a dynamic model of knowledge accumulation over time and career paths to find an underlying …Read More

Biggs, Michael, (2016), “Manna from Helicopters”, Project Syndicate, 13 Μαΐου In recent years, the global economy has been plagued by inadequate demand and the rising risk of deflation. Central banks have responded with a range of unconventional measures, including quantitative easing (QE) and negative interest rates. Today, however, there is a growing consensus that the efficacy of monetary stimulus has reached its limits. Further efforts to support economic recovery will likely require …Read More

Beetsma, Roel, Debrun, Xavier, (2016), “Debunking ‘fiscal alchemy’: The role of fiscal councils”, Voxeu, 16 Μαΐου The success of independent central banks is often used to argue in favour of independent fiscal councils with the aim of promoting sound fiscal policies. But unlike central banks, fiscal councils have no policy levers to pull – they can bark but never bite. This column explores the theoretical foundations and practical implications of fiscal councils. The …Read More

Braun, Benjamin, (2016), “Schäuble vs Draghi: German losses from ECB policy are real but self-inflicted”, LSE blog, 12 Μαΐου Germany has recently voiced criticism of the European Central Bank (ECB) from the perspective that its policies, such as quantitative easing, have a particularly negative effect within Germany. Benjamin Braun argues that while there have indeed been German losses from the ECB’s policies, much of the problem stems from the country’s reluctance …Read More

Labini, Francesco Sylos, (2016),  “EU Austerity And The Brain Drain From The South”, Social Europe, 10 Μαΐου The debate on the sustainability of the European single currency seems to have focused exclusively on the requirement that EU member states comply with the macro-economic financial parameters established by the dictates of austerity policies. The absence of any collective reflection on how to boost structural economic development is astonishing at a time when …Read More

Gandrud, Christopher, Hallerberg, Mark, Véron, Nicolas, (2016), “The European Union remains a laggard on banking supervisory transparency”, Bruegel, 10 Μαΐου Supervisory transparency, or the publication by prudential supervisors of data about the institutions they supervise, is an essential tool to ensure market discipline in the banking sector and thus supports the public-policy objective of financial stability, in complement to disclosures made by the banks themselves. In the European Union, we find that the already …Read More

Ippolito, Filippo,  Peydró, José-Luis, Polo, Andrea, Sette, Enrico, (2016),  “Double bank runs, liquidity risk management, and Basel III”, Voxeu, 10 Μαΐου By providing liquidity to credit line borrowers and depositors, banks are potentially exposed to simultaneous runs on their assets and liabilities. This risk became a reality when the European interbank market froze in the summer of 2007. This column discusses the risk of double-bank runs, liquidity risk management by banks and the implications …Read More

Buffie, Nick, (2016), “Unemployment Is Down, but Unworked Hours Are Still High”, Center for Economic and Policy Research, 5 Μαΐου This Friday morning, the Bureau of Labor Statistics will release the latest jobs figures for the month of April. The unemployment rate and the number of jobs created will likely be the major focuses of most reporting. But there is an important and less noticed problem in today’s economy. Specifically, the weakness of …Read More

Ford, Nicholas, Horioka, Charles Yuji, (2016), “The ‘real’ explanation of the Feldstein-Horioka puzzle – and what it means”, Voxeu, 5 Μαΐου The Feldstein-Horioka puzzle concerns why levels of investment and saving are correlated across countries. This is puzzling because financial markets can rapidly move capital between countries, and there is no reason why the best investment opportunities should be in a saver’s home country. This column posits a disarmingly simple solution to this …Read More

Bruno, Randolph, Campos, Nauro F., Estrin, Saul, Tian, Meng, (2016),  “The FDI premium from EU membership”, Voxeu, 5 Μαΐου The current Brexit debate has highlighted questions about the benefits and costs of EU membership. This column considers the effect of membership on foreign direct investment (FDI). Using several measures, EU membership is found to increase FDI inflows by 14–38% between 1985 and 2013. These results support arguments for economic integration, and indicate that, like …Read More