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Maximizing Price Stability in a Monetary Economy

Mosler, Warren, Silipo, Damiano B., (2016), “Maximizing Price Stability in a Monetary Economy”, Levy Economics Institute, April In this paper we analyze options for the European Central Bank (ECB) to achieve its single mandate of price stability. Viable options for price stability are described, analyzed, and tabulated with regard to both short- and long-term stability and volatility. We introduce an additional tool for promoting price stability and conclude that public purpose is …Read More

Quantitative Easing: An Underappreciated Success

Gagnon, Joseph E., (2016), “Quantitative Easing: An Underappreciated Success”, Peterson Institute for International Economics, April After short-term interest rates in many advanced economies fell below 1 percent, central banks turned to quantitative easing (QE) to support economic growth. They purchased massive and unprecedented amounts of long-term bonds in an effort to reduce long-term borrowing costs. Nevertheless, recovery from the Great Recession proved disappointingly slow. Recently, some central banks have pushed short-term …Read More

The Eurozone’s Zeno paradox – and how to solve it

Pisani-Ferry, Jean, (2016), “The Eurozone’s Zeno paradox – and how to solve it”, VoxEU, 10 April The dramatic episodes in the Eurozone in the past few years called for a number of policy reactions. Yet the response was usually limited to what was deemed indispensable to ensure survival. This column discusses how such half-solutions paved the way for future crises. The author also puts forward a few proposals regarding the …Read More

The European Union’s growing innovation divide

Veugelers, Reinhilde, (2016), “The European Union’s growing innovation divide”, Bruegel, 7 April There is a significant divide between the European Union countries with the greatest capacity to innovate, and those with the least capacity to innovate. The difficult convergence process has been proceeding only very slowly and unevenly, and more recently seems to have come to a halt. A particular weak spot for the EU is corporate investment in research; in this …Read More

What We Could Have Learned from the New Deal in Confronting the Recent Global Recession

Kregel, Jan, (2016), “What We Could Have Learned from the New Deal in Confronting the Recent Global Recession”, Levy Economics Institute, March To the extent that policymakers have learned anything at all from the Great Depression and the policy responses of the 1930s, the lessons appear to have been the wrong ones. In this public policy brief, Director of Research Jan Kregel explains why there is still a great deal we …Read More

The ECB’s latest gimmick: Cash for loans

Gros, Daniel, Valiante, Diego, De Groen, Willem Pieter, (2016), “The ECB’s latest gimmick: Cash for loans”, CEPS, 29 Μarch Among several important monetary policy initiatives decided by the European Central Bank on 10 March 2016 was the launch of a new set of targeted longer-term refinancing operations (TLTRO II), expanding on the previous TLTRO. In assessing this scheme, which might cost up to €24 billion, this Policy Brief finds that while it could …Read More

A proposal to revive the European Fiscal Framework

Claeys, Gregory, Darvas, Zsolt, Leandro, Alvaro, (2016), “A proposal to revive the European Fiscal Framework”, Bruegel, 29 March The current inefficient European fiscal framework should be replaced with a system based on rules that are more conducive to the two objectives, more transparent, easier to implement and which have a higher potential to be complied with. Relevant Posts Marelli, Enrico, Signorelli, Marcello, (2016), “Closer fiscal integration is unavoidable if the Eurozone is to survive”, …Read More

Completing Europe’s economic and monetary union

Dabrowski, Marek, (2016), “Completing Europe’s economic and monetary union“, Bruegel Publications, 10 March This note has been written in response to the UK House of Lords European Union Committee’s Call for Evidence on ‘Completing Europe’s Economic and Monetary Union’. The opinions presented here represent solely the view of their author and not necessarily the institutions, which he is affiliated with. Thus, these opinions can be attributed publicly to the author only. Taking …Read More

As The Euro Time Bomb Ticks Away The ECB Turns Desperate

Bibow, Jörg, (2016), “As The Euro Time Bomb Ticks Away The ECB Turns Desperate”, Social Europe, 9 March. These are not happy times for Europe. Ukraine, Russia, and rising anti-democratic influences in Hungary and Poland represent latent threats at the European Union’s eastern front. The prospect of Brexit is a more acute one at its western front. After letting loose manifold conflicting forces that continue shaping internal politics in many EU countries …Read More

Central banks: from omnipotence to impotence?

Papadia, Francesco, Wolff, Guntram B., (2016), “Central banks: from omnipotence to impotence?”, Bruegel Blog, 2 March. Like the price of financial assets, the market assessment of the capacity of central banks to achieve their price stability objective fluctuates between omnipotence and impotence. We do not agree with this binary view of the world and we examine in this post the case of the European Central Bank (ECB). We argue that the ECB still …Read More