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The Case Against Helicopter Money

Heise, Michael, (2016), “The Case Against Helicopter Money”, Project Syndicate,  20 Απριλίου Despite years of expansionary monetary policy, the European Central Bank has failed to push inflation back up to its target of “below but close to 2%.” The latest measures – a zero interest rate on the ECB’s main refinancing operations, an increase in monthly asset purchases from €60 billion ($67 billion) to €80 billion, and an even lower deposit …Read More

“Social dumping” and posted workers: a new clash within the EU

Vaccarino, Elena, Darvas, Zsolt, (2016), ” “Social dumping”and posted workers: a new clash within the EU”, Bruegel, 7 Μαρτίου European companies often post employees to another EU country to work there temporarily. These ‘posted workers’ must be paid at least the minimum wage of the host country, yet their wages can be lower than the wages of local workers. Now proposals for ‘the same pay for the same work at the same place’ …Read More

Slow Growth Is a Fact of Life in the Post-Crisis World

Blanchard, Olivier, (2016), “Slow Growth Is a Fact of Life in the Post-Crisis World”, Peterson Institute for International Economics, 13 Απριλίου Once the acute phases of the financial and euro crises were over, it was clear that it would take time for advanced economies to recover. The history of past financial crises gave a clear warning that recovery would typically be long and painful. Today, the scars are largely healed but growth is …Read More

Global Crisis in the US vs the Eurozone: Banks and monetary policy

Cukierman, Alex, (2016), “Global Crisis in the US vs the Eurozone: Banks and monetary policy”, VoxEu, 16 Απριλίου Although it started in the US, the Global Crisis had non-negligible repercussions in Europe as well due to substantial purchases of subprime securities by European banks and financial institutions. Those problems were subsequently amplified by European sovereign debt crises experienced by countries with weak fiscal institutions. Both the Fed and the ECB reacted …Read More

What’s Wrong With Negative Interest Rates?

Stiglitz, Joseph, (2016), “What’s Wrong With Negative Interest Rates?”, Social Europe, 13 Απριλίου The fact is that the eurozone’s structure and the ECB’s policies have ensured that banks in the underperforming countries, and especially in the crisis countries, are very weak. Deposits have left, and the austerity policies demanded by Germany are prolonging the aggregate-demand shortfall and sustaining high unemployment. In these circumstances, lending is risky, and banks have neither …Read More

The ECB can make a difference if deeds match words

Ligthart, Nick, Mody, Ashoka, (2016) ,”The ECB can make a difference if deeds match words”, Voxeu, 14 Απριλίου On 10 March 2016, ECB President Mario Draghi announced new measures to stimulate economic activity and raise inflation in the Eurozone (Constâncio and Draghi 2016b). The action was prompted by the worry that ‘core’ inflation, which strips out volatile food and energy prices, has remained stubbornly close to, or under, an annual …Read More

Youth unemployment in the Mediterranean region and its long-term implications

Boot, Nuria, Wilson, Karen E., Wolff, Guntram B., (2016), “Youth unemployment in the Mediterranean region and its long-term implications”, Bruegel, 13 Απριλίου Youth unemployment in the Mediterranean region has consequences for the whole of Europe. Tackling youth unemployment in the region must continue to be a high policy priority. Europe’s Mediterranean neighbourhood has become a focal point of attention due to the refugee crisis. With over a million people arriving in Europe in the …Read More

Breaking the link between housing cycles, banking crises, and the recession

Persaud, Avinash, (2016), “Breaking the link between housing cycles, banking crises, and the recession”, Voxeu, 14 Απριλίου Since the breakup of Bretton Woods in the early 1970s, the housing market has been at the centre of the biggest banking crises across the world. This column considers the nexus between housing, banking, and the economy, and how these ties can be broken. It argues for two modest regulatory changes in banking and …Read More

Financial cycles, labour misallocation, and economic stagnation

Borio, Claudio, Kharroubi, Enisse, Upper, Christian, Zampolli, Fabrizio, (2016), “Financial cycles, labour misallocation, and economic stagnation”, Voxeu, 14 Απριλίου Some analysts claim that secular stagnation is responsible for the disappointing post-crisis economic performance. This column provides a different explanation that points to an unsuspected villain: the misallocation of resources (in our case, labour) during the pre-crisis financial boom and the long shadow it has cast post-crisis. The findings draw on an empirical analysis …Read More

How to reform EU fiscal rules

Claeys, Grégory, Darva, Zsolt, (2016), “How to reform EU fiscal rules”, Bruegel, 12 Απριλίου The austerity policies implemented in many European countries since 2010 have contributed to the poor economic recovery, raising questions about why EU budget rules failed to deliver both economic stabilisation and public debt sustainability. In theory the current rules could do a good job, but in practice they face major hurdles. A key indicator used in the current rules is the structural budget balance. …Read More