Joshua Kirschenbaum and NicolasVeron, (2019), “The European Union must change its supervisory architecture to fight money laundering”, 26 February Money laundering scandals at EU banks, often linked to Russia, have become pervasive. Reform of anti–money laundering (AML) supervision is urgent. Illicit actors have repeatedly moved billions of dollars through individual banks. This flow sustains the Kremlin’s patronage system at home by serving as an outlet for elites while it simultaneously …Read More

Ester Faia and Vincenzo Pezone, (2019), “Monetary policy and the cost of wage rigidity: Evidence from the stock market”, VoxEU, 12 March Policymakers are concerned about effecting real change with monetary policy, particularly in the context of wage rigidity. This column uses extensive Italian data to analyse the extent to which wage rigidity induced by collective bargaining amplifies the effects of monetary policy. The volatility of stock market returns reacts …Read More

ECB, (2019), “ECB staff macroeconomic projections for the euro area”, March Real GDP growth remained unexpectedly sluggish in the fourth quarter of 2018, and recent indicators point to substantially weaker than previously expected activity also in the first half of 2019. While some temporary factors are likely to have contributed to the slowdown in activity in late 2018, the broad-based worsening of economic sentiment indicators across countries and sectors in …Read More

Gilles Saint-Paul, (2019), “From microeconomic favouritism to macroeconomic populism”, VoxEU, 7 March Macroeconomic populism typically leads to higher levels of public debt, public spending, deficits, and crises. Nevertheless, this column argues that it is rational for groups of voters to vote for a populist who reflects their interests, because they will be favoured when a fiscal adjustment occurs. The greater the fiscal adjustment required, the more likely voters are to elect a …Read More

Bloomberg, (2019), “Europe Isn’t Ready for the Next Recession”, 8 March The European Central Bank surprised financial markets yesterday with moves to loosen monetary policy. The prospects for growth in the euro zone have dimmed lately, and policy was going to be tweaked at some point unless things picked up. But a change wasn’t expected so soon. ECB President Mario Draghi and his colleagues are apparently worried. Relevant Posts Ashoka …Read More

Marcin Bielecki, Michal Brzoza-Brzezina and Marcin Kolasa, (2019), “The impact of population ageing on monetary policy”, VoxEU, 5 March Population ageing is likely to affect many areas of life, from pension system sustainability to housing markets. This column shows that monetary policy can be considered another victim. Low fertility rates and increasing life expectancy substantially lower the natural rate of interest. As a consequence, central banks are more likely to …Read More

Christian Keuschnigg and Michael Kogler, (2019), “Trade and innovation: The Schumpeterian role of banks”, VoxEU, 4 March Only strong banks can fulfil their Schumpeterian role by efficiently reallocating credit. The column argues that high capital standards, efficient bankruptcy laws, and a lower cost of bank equity improve credit reallocation and thereby support the productive specialisation of the economy. An efficient banking sector also magnifies the gains from trade liberalisation by …Read More

OECD, (2019), “Portugal can use its economic recovery to build up resilience”, OECD, 18 February Portugal’s economic recovery is now well established, with GDP back to pre-crisis levels, a substantially lower unemployment rate and renewed investment and domestic consumption now joining a robust export sector to drive the economy. Efforts should now focus on reducing vulnerabilities to build resilience to future shocks, according to a new OECD report. Relevant Posts …Read More