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GDP-linked bonds: A primer

Cecchetti, Stephen, Schoenholtzm Kim, (2017), “GDP-linked bonds: A primer “, VoxEu, 1 March Policymakers and economists have been looking for ways to make it easier to manage increasing debt burdens. This column assesses one possible solution: GDP-linked bonds that tie the size of debt payments to an economy’s wellbeing. There are clear benefits to a government from issuing GDP-linked bonds, but establishing investor confidence in these instruments will require a …Read More

Stubborn Germans: Stuck In Austerity/Stability

Hacker, Björn, Koch, Cédric , (2017), “Stubborn Germans: Stuck In Austerity/Stability”, Social Europe, 27 February Led by the current and previous federal government under Chancellor Angela Merkel and her CDU, the advocates of a stability union for the most part favour preservation of the status quo of the EMU architecture. The fundamental reasons for the Eurozone crisis are from this angle to be blamed on the failure of the crisis states …Read More

Growth Of Minimum Wages Accelerates Across Europe

Fric, Karel, (2017), “Growth Of Minimum Wages Accelerates Across Europe”, Social Europe, 27 February The growth in average (nominal) pay of employees has accelerated in recent years in EU countries after a slump following the economic crisis (AMECO data). Similar developments show up in data on collectively agreed wages. However, higher wage growth figures do not automatically mean that all employees benefit equally. On 14 February 2017, the European Trade …Read More

Foreign booms, domestic busts: The global dimension of banking crises

Cesa-Bianchi, Ambrogio, Martin, Fernando Eguren, Thwaites, Gregory, (2017), “Foreign booms, domestic busts: The global dimension of banking crises”, VoxeU, 23 February Banking crises tend to happen in ‘waves’ across countries. In examining why this occurs, this column shows how foreign financial developments in general, and global credit growth in particular, are powerful predictors of domestic banking crises. The channels seem to be financial rather than related to trade, and include transmission …Read More

Governments and Promised Fiscal Consolidations : Do They Mean What They Say?

Mulas-Granados, Carlos, Jalles, João Tovar, Schena, Michela, Gupta, Sanjeev, (2017), “Governments and Promised Fiscal Consolidations : Do They Mean What They Say?”, IMF Working Papers No. 17/39, 23 February This paper analyses the causes and consequences of fiscal consolidation promise gaps, defined as the distance between planned fiscal adjustments and actual consolidations. Using 74 consolidation episodes derived from the narrative approach in 17 advanced economies during 1978 – 2015, the paper …Read More

Italexit is not a solution for Italy’s problems

Codogno, Lorenzo, Galli, Giampaolo, (2017), “Italexit is not a solution for Italy’s problems”, LSE EUROPP, 24 February Beppe Grillo’s Five Star Movement riding high in the polls in Italy has led to speculation over the prospect of the country leaving the euro.Lorenzo Codogno and Giampaolo Galli argue that an ‘Italexit’ would be a catastrophic scenario, with incommensurable economic, social, and political costs lasting for many years. They note that redenomination, and a likely …Read More

Unleashing Innovation and Entrepreneurship in Europe: People, Places and Policies

Leceta, Manuel, Renda, Andrea, Konnola, Totti, Simonelli, Felice, (2017), “Unleashing Innovation and Entrepreneurship in Europe: People, Places and Policies”, Report of a CEPS Task Force, 22 February This report sets out the elements for the design of a streamlined and future-proof policy on innovation and entrepreneurship in Europe. It is the result of a collective effort led by CEPS, which formed a Task Force on Innovation and Entrepreneurship in the EU, …Read More

Maastricht’s Flaws Still Plague Europe, 25 Years Later

Gilbert, Mark, (2017), “Maastricht’s Flaws Still Plague Europe, 25 Years Later”, BloombergView, 24 February Twenty five years ago this month, the representatives of 12 countries gathered in the Dutch city of Maastricht to sign the Treaty on European Union. Its claim to mark “a new stage in the process of creating an ever closer union among the peoples of Europe” looks grandiose and overblown a quarter of a century later. More …Read More

Dealing with Sovereign Debt—The IMF Perspective

Hagan, Sean, Obstfeld, Maurice, Thomsen, Poul M., (2017), “Dealing with Sovereign Debt—The IMF Perspective”, iMFdirect, 23 February Debt is central to the functioning of a modern economy. Firms can use it to finance investments in future productivity. Households can use it to finance lumpy purchases, such as big consumer durables, or a home. Sometimes, however, firms’ investments do not pan out or a household’s main earner loses his or her job. …Read More

European Semester Winter Package: review of Member States’ progress towards economic and social priorities

European Commission, (2017), “European Semester Winter Package: review of Member States’ progress towards economic and social priorities”, European Commission – Press release, 22 February The European Commission today publishes its annual analysis of the economic and social situation in the Member States, including an assessment of remaining imbalances. It also publishes a report on the implementation of the Fiscal Compact, a report analysing the debt situation in Italy and a …Read More