Martin Hopner and Mark Lutter, (2018), “The diversity of wage regimes: why the Eurozone is too heterogeneous for the Euro”, European Political Science Review, Volume 10, Issue 1 Why did the transnational synchronization of wage inflation fail during the first 10 years of the euro? We analyze data from 1999 to 2008 for 12 euro members and estimate increases of nominal unit labor costs both in the overall economy and in …Read More
Crowding out risk: Sovereign debt, banks, and firms’ investment in Italy
Pierluigi Balduzzi, Emanuele Brancati, Fabio Schiantarelli, (2018), “Crowding out risk: Sovereign debt, banks, and firms’ investment in Italy”, VoxEU, 9 November In its budget draft, the Italian government has decided to pursue an expansionary fiscal policy, increasing the deficit to 2.4% of GDP in 2019 and maintaining an expansionary posture for the following two years. The bulk of the deficit increase is due to a minimum universal income scheme and …Read More
European Economic Forecast. Autumn 2018. Greece
European Commission, (2018), “European Economic Forecast. Autumn 2018. Greece”, Economic and Financial Affairs, Institutional Paper 089, 8 November Greece has exited its European Stability Mechanism programme and economic growth is taking hold, though vulnerabilities remain. Sustaining the reform momentum will be instrumental in underpinning investment and convergence. Employment is recovering and exports are expected to perform well by historical standards. Solid growth, in combination with low borrowing needs and high primary fiscal surpluses should help …Read More
European Economic Forecast. Autumn 2018
European Commission, (2018), “European Economic Forecast. Autumn 2018”, Economic and Financial Affairs, Institutional Paper 089, 8 November Growth in the euro area is forecast to ease from a 10-year high of 2.4% in 2017 to 2.1% in 2018 before moderating further to 1.9% in 2019 and 1.7% in 2020. The same pattern is expected for the EU27, with growth forecast at 2.1% in 2018, 2.0% in 2019 and 1.9% in …Read More
Sovereign bond pricing in the euro area: When legal clauses matter
Marcos Chamon, Julian Schumacher, Christoph Trebesch, (2018), “Sovereign bond pricing in the euro area: When legal clauses matter”, VoxEU, 6 November The discussion on sovereign debt restructuring in the euro area has recently focused on legal considerations, in particular on whether the legal framework should be reformed to make restructurings more ‘viable’, for example via new collective action clauses (Bénassy-Quéré et al. 2018, Tabellini 2018, Pisani-Ferry and Zettelmeyer 2018). Should …Read More
Volume of retail trade unchanged in euro area
Eurostat/Volume of retail trade unchanged in euro area/7 November 2018 In September 2018 compared with August 2018, the seasonally adjusted volume of retail trade remained unchanged in the euro area (EA19) and decreased by 0.1% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In August, the retail trade volume increased by 0.3% both in the euro area and in the EU28. Relevant Posts …Read More
The consequences of Italy’s increasing dependence on domestic debt-holders
Jan Mazza, (2018), “The consequences of Italy’s increasing dependence on domestic debt-holders”, Bruegel, 6 November What could happen then, if the government indeed had to revise its estimates downward and provide a rebalancing of its fiscal position (either through increased revenues or lower expenditure)? Several signals point to the usual suspects: Italian residents, and their still substantial private wealth. On this, there is perhaps surprising agreement between the Italian ruling …Read More
2 Views of Angela Merkel’s Legacy: Stoic Leadership, and Economic Malpractice
Peter S. Goodman, (2018), “2 Views of Angela Merkel’s Legacy: Stoic Leadership, and Economic Malpractice”, The New York Times, 1 November But many economists take a less generous view of the German chancellor’s place in modern European history. Far from a hero who anchored the bloc under profound challenges, she played a leading role in amplifying an economic crisis, allowing it to erupt into an existential threat to the European …Read More
Italy-EU Budget Confrontation: Prospects for a Happy Ending
Kirkegaard J., (2018), “Italy-EU Budget Confrontation: Prospects for a Happy Ending”, Peterson Institute for International Economics, 5 November Perhaps predictably, the new anti-establishment Italian coalition government, which took office in May, is engaged in a confrontation with the European Commission over its expansionary budget. With a significantly larger deficit planned for the coming fiscal year, the budget conflicts with the EU’s fiscal rules and reneges on commitments made by the …Read More
The Labor Market Integration of Migrants in Europe: New Evidence from Micro Data
Giang Ho and Rima Turk-Ariss, (2018), “The Labor Market Integration of Migrants in Europe: New Evidence from Micro Data”, IMF Working Paper, No. 18/232, 1 November This paper presents novel empirical evidence on the labor market integration of migrants across Europe. It investigates how successfully migrants integrate in 13 European countries by applying a unified framework to analyze a rich micro dataset with over ten million individuals surveyed between 1998 …Read More