OECD, (2017), “Jobs gap closes but recovery remains uneven”, 13 June The job market continues to improve in the OECD area, with the employment rate finally returning to pre-crisis levels. But people on low and middle incomes have seen their wages stagnate and the share of middle-skilled jobs has fallen, contributing to rising inequality and concerns that top earners are getting a disproportionate share of the gains from economic growth, …Read More
New Pact for Europe National Report GREECE
ELIAMEP, (2017), “New Pact for Europe National Report GREECE”, ELIAMEP, June This report is inspired by the discussions of the Greek National Reflection Group enriched by exchanges with National Reflection Groups from France and Estonia. It reflects on the ‘state of the Union’ from a national perspective and discusses the main challenges the EU and its members are facing, taking into account both the European and national perspective. Finally, it proposes …Read More
House prices and monetary policy in the euro area: evidence from structural VARs
Nocera, Andrea, Roma, Moreno, (2017), “House prices and monetary policy in the euro area: evidence from structural VARs”, ECB, June We use a structural Bayesian vector autoregression model for seven euro-area countries (Belgium, France, Germany, Ireland, Italy, the Netherlands, and Spain) for the period 1980:Q1- 2014:Q4 to provide a systematic structural analysis of the impacts of housing demand shocks on economic activity and the role of house prices in the monetary …Read More
Capital Requirements For Banks Are Needed But Costly—Only Limited Increases Are Called For
William R., Cline, (2017), “Capital Requirements For Banks Are Needed But Costly—Only Limited Increases Are Called For”, PIIE, 12 June Cline’s study, one of several analyses of financial stability published by PIIE since the crisis of 2008–09, reviews the extensive literature on banking crises, regulations, and their impact on capital formation and economic growth. It looks indepth at the multilateral voluntary framework on bank capital adequacy known as Basel III, established …Read More
Why keeping the balance sheet of the Federal Reserve constant is equivalent to a gradual exit
Gros, Daniel, (2017), “Why keeping the balance sheet of the Federal Reserve constant is equivalent to a gradual exit”, Vox Eu, 12 June When interest rates are at the zero lower bound, the stance of monetary policy is judged by the size of the balance sheet of the central bank. However, this is not quite correct since one part of the balance sheet is determined by the demand for cash, which …Read More
Infrastructure in Greece-Funding the future
PwC, (2017), “Infrastructure in Greece-Funding the future”, March In Greece, the infrastructure investments were affected by the deep economic recession. The infrastructure investment gap is between 0.8 pp of GDP (against the European average) or 1.4 pp of GDP (against historical performance) translating into 1.1% or € 2bln new spending per year. Infrastructure investments have an economic multiplier of 1.8x** which can boost demand of other sectors. The construction sector will …Read More
Monetary-fiscal interactions and the euro area’s malaise
Jarociński, Marek, Maćkowiak, Bartosz, (2017), “Monetary-fiscal interactions and the euro area’s malaise”, ECB, June 2017 When monetary and fiscal policy are conducted as in the euro area, output, inflation, and government bond default premia are indeterminate according to a standard general equilibrium model with sticky prices extended to include defaultable public debt. With sunspots, the model mimics the recent euro area data. We specify an alternative configuration of monetary and fiscal …Read More
The Study Europe’s Rate-Setters Should Read
Giugliano, Ferdinando, (2017), “The Study Europe’s Rate-Setters Should Read”, Bloomberg View, 8 June A key argument for hurrying up with a monetary tightening is that negative rates have hurt bank profitability, restricting lenders’ ability to give credit to families and firms. But is it really the case? How low can interest rates go before they become a drag on the economy? A new way of thinking about this problem comes from …Read More
Charting the next steps for the EU financial supervisory architecture
Véron, Nicolas, (2017), “Charting the next steps for the EU financial supervisory architecture”, Bruegel, June The combination of banking union and Brexit justifies a reform of the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) in the near term, in line with the subsidiarity principle. The other EU-level financial authorities, namely the European Insurance and Occupational Pensions Authority (EIOPA), European Systemic Risk Board (ESRB), Single Resolution Board …Read More
Europe (Finally) Shows How to Deal With a Failing Bank
Bloomberg View, (2017), “Europe (Finally) Shows How to Deal With a Failing Bank”, 8 June Credit where credit’s due: The sale for 1 euro of Banco Popular Espanol SA, a failing Spanish bank, to rival lender Banco Santander SA shows how the euro zone should handle such cases. The regulators acted swiftly and fairly. Global markets barely noticed. This is a model for future interventions. Banco Popular’s troubles date back to …Read More