Andrew Watt, (2020), “Europe needs a strong macroeconomic policy core—but not a Six (or Two) Pack“, Social Europe, 6 February A conceptual and institutional solution is required to permit member states to finance through borrowing those expenditures that raise potential output and create publicly owned assets, particularly where these are clearly in line with common EU goals. There are more or less ambitious ways to achieve this, ranging from a …Read More
Beyond ‘green growth’
Frank Hoffer, (2020), “Beyond ‘green growth’”, Social Europe, 22 January The story goes like this. Brown jobs have to be replaced by green jobs. There will be victims of decarbonisation but for the greater good of saving the planet this is inevitable. Greening the economy however also opens up opportunities and will generate alternative jobs and growth. Successful greening can position advanced industrialised European nations as green global champions and the …Read More
Learning about fiscal multipliers during the European sovereign debt crisis
Lucyna Gornicka, Christophe Kamps, Gerrit Koester, Nadine Leiner-Killinger, (2020), “Learning about fiscal multipliers during the European sovereign debt crisis“, VoxEU, 23 January Recent studies have highlighted that the fiscal multipliers used by institutional forecasters were gradually adjusted upwards as the European sovereign debt crisis developed. This column confirms this finding, using a new dataset compiled from European Commission forecasts under the Excessive Deficit Procedure of the Stability and Growth Pact. …Read More
Central bank independence at risk: Low rates, new risks
Jean Barthélemy, Eric Mengus, Guillaume Plantin, (2020), “Central bank independence at risk: Low rates, new risks“, VoxEU, 21 January Real interest rates are at historically low levels in advanced economies. This column looks at the implications for central bank independence. It argues that low rates, even though they relax the budget constraint of the public sector, will not necessarily strengthen central bank independence. Quite counterintuitively, in the current context of …Read More
A Green Deal will not work without refocusing productivity
Karl Aiginger, (2020),” A Green Deal will not work without refocusing productivity “, VoxEU, 20 January The new president of the European Commission, Ursula von der Leyen, has announced a ‘European Green Deal’ and the Commission has asserted Europe’s need to develop a new growth model to achieve climate neutrality. However, the Commission’s limited view of ‘productivity’ ignores the fact that raising labour productivity can raise emissions and accelerate climate change. …Read More
European green finance is expanding, a discount on bank capital would discredit it
Alexander Lehmann, (2020), “European green finance is expanding, a discount on bank capital would discredit it“, Bruegel, 15 January If EU banks are to mobilise a greater share of loans for sustainable projects they will need a reliable policy framework, clear internal performance targets and the relevant skills. A discount on bank capital underlying such assets is neither justified nor likely effective. A comprehensive review of how climate risks are …Read More
Central banks and climate change
Markus K. Brunnermeier, Jean-Pierre Landau, (2020), Central banks and climate change, VoxEU, 15 January Central banks have been called on to contribute to fighting climate change. This column presents a framework for thinking about the issue and identifies some major trade-offs and choices. It argues that climate should be a major part of risk assessments and that capital ratios could be used in a proactive way by applying favourable regimes …Read More
The European Green Deal: will the ends, will the means?
Andrew Watt, (2020), ” The European Green Deal: will the ends, will the means?”, Social Europe, 14 January Carbon pricing will foster climate-friendly investment by the private sector but the investment gap if climate goals are to be reached is huge: the commission estimates it at €260 billion (around 1.5 per cent of 2018 gross domestic product) annually until 2030, not including mitigating the social costs of transition. Public-sector involvement …Read More
Riding through the storm: Lessons and policy implications for policymaking in EMU
Marco Buti, (2020), “Riding through the storm: Lessons and policy implications for policymaking in EMU“, VoxEU, 12 January In December 2019, Marco Buti left the position of Director General for Economic and Financial Affairs at the European Commission at the end of a rough journey through the crisis and its aftermath. In this column, he draws the main lessons out of five key moments in the crisis for the completion of EMU …Read More
Zombification is a real, not a monetary phenomenon: Exorcising the bogeyman of low interest rates
Ulrich Bindseil, Jürgen Schaaf, (2020), “Zombification is a real, not a monetary phenomenon: Exorcising the bogeyman of low interest rates” , VoxEU, 10 January Low nominal interest rates have worried central bank critics for different reasons over the last decade. First, calls for pre-emptive interest rate increases were motivated by fears of a return of excessive inflation. Then, they were said to fuel financial bubbles, and therefore to eventually lead …Read More