Brookings Institution, (2013), “The G-20 and Central Banks in the New World of Unconventional Monetary Policy”. Five years after the first meeting of G-20 leaders, and decisive action by the central banks and treasuries of the world’s major economies that prevented the financial crisis of 2008-2009 from turning into a 1930’s style world-wide depression, the world economy still remains fragile. The original fiscal stimulus agreed upon in the April 3rd …Read More
What Is European Integration Really About? A Political Guide for Economists
Spolaore, En., (2013), “What Is European Integration Really About? A Political Guide for Economists“, Journal of Economic Perspectives, Vol. 27, N.3, pp. 125-44. Europe’s monetary union is part of a broader process of integration that started in the aftermath of World War II. In this “political guide for economists,” we look at the creation of the euro within the bigger picture of European integration. How and why were European institutions …Read More
Political Credit Cycles: The Case of the Eurozone
Fernández-Villaverde, J., Garicano, L., Santos, T., (2013) “Political Credit Cycles: The Case of the Eurozone”, Journal of Economic Perspectives, Vol. 27, N3, pp. 145-66. We study the mechanisms through which the entry into the euro delayed, rather than advanced, key economic reforms in the eurozone periphery and led to the deterioration of important institutions in these countries. We show that the abandonment of the reform process and the institutional deterioration, …Read More
The Greek debt restructuring: an autopsy
Zettelmeyer, J., Trebesch, Chr., Gulati, M., “The Greek debt restructuring: an autopsy”, Vol., 28, Issue 75, pages 513–563. The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief – over 50% of 2012 GDP – with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key creditors. But it did so …Read More
Fiscal union in Europe? Redistributive and stabilizing effects of a European tax-benefit system and fiscal equalization mechanism
Bargain, Ol., Dolls, M., Fuest, Cl., Neumann, D., Peichl, Andr., Pestel, N., Siegloch, S., (2013), “Fiscal union in Europe? Redistributive and stabilizing effects of a European tax-benefit system and fiscal equalization mechanism”, Economic Policy, Vol. 28, Issue 75, pp. 375–422. The current debt crisis has given rise to a debate concerning deeper fiscal integration in Europe. The view is widespread that moving towards a ‘fiscal union’ would have stabilizing effects …Read More
The Single Market as an Engine for Employment through External Trade
Rueda-Cantuche, J. M., Sousa, N., Andreoni, V., Arto, I. (2013), “The Single Market as an Engine for Employment through External Trade”, Journal of Common Market Studies, Vol. 51, Issue 5, pp: 931–947. This article quantifies for the first time the European employment effects of extra-EU exports and the correct number of jobs generated through the intra-EU trade (single market) associated with the production of such exports. The literature has neglected …Read More
Household Debt and the European Crisis
Chmelar, Al., (2013), “Household Debt and the European Crisis”, ECRI Research Report. The fall in economic output all over Europe since 2008 has had important consequences for household liabilities. Major growth in demand and supply for household credit products has generated an increase in household debt, which contributed to growth rates during the pre-crisis period but – in some countries – became household-debt overhangs and helped inflate asset bubbles. In …Read More
Assessing the Impact and Phasing of Multi-year Fiscal Adjustment: A General Framework
Roaf, J., (2013), “Assessing the Impact and Phasing of Multi-year Fiscal Adjustment: A General Framework”, IMF Working Paper, N.,13/182. This paper provides a general framework to assess the output and debt dynamics of an economy undertaking multi-year fiscal adjustment. The framework allows country-specific assumptions about the magnitude and persistence of fiscal multipliers, hysteresis effects, and endogenous financing costs. In addition to informing macro projections, the framework can also shed light on the …Read More
End Austerity Now
Blyth, M., (2013), “End Austerity Now”, www.project-syndicate.org, 20 Αυγούστου. In recent weeks, talk about a budding recovery in the eurozone has gained traction, with key indices pointing to expansion in the core countries – data that many are citing as evidence that austerity is finally working. Money-market funds from the United States are returning, albeit cautiously, to resume funding of European bank debt. Even Goldman Sachs is now bullishly piling into European …Read More
To end the Eurozone crisis, bury the debt forever
Pâris, P., Wyplosz, Ch., (2013), “To end the Eurozone crisis, bury the debt forever”, www.voxeu.org, 6 Αυγούστου. The Eurozone’s debt crisis is getting worse despite appearances to the contrary. How can we end it? This column presents five major options for reducing crisis countries’ debt. Looking into the details, it seems the only option that is both realistic and effective is for countries to default by selling monetised debt to the …Read More