Hope, David, (2016), “Estimating the effect of the EMU on current account balances: A synthetic control approach”, European Journal of Political Economy, 24 Μay The European sovereign debt crisis wrought major political and economic damage on the European Monetary Union (EMU). This led to a reassessment of the pre-crisis period of economic growth and stability in the EMU, shifting attention to the macroeconomic imbalances that emerged between member states, especially those in …Read More

Semyon Malamud, Francesca Zucchi, (2016), “Liquidity, innovation, and endogenous growth”, ECB Working Paper 1919, Ιούνιος We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that financing constraints lead firms to decrease production but may spur investment in innovation (R&D). We characterize which firms should substitute production for innovation in the face of constraints and thus …Read More

André Ebner, Falko Fecht, Alexander Schulz, (2016), “How central is central counterparty clearing? A deep dive into a European repo market during the crisis”, Bundesbank Discussion Paper No 14/2016, June Repo markets offering central counterparty (CCP) clearing and anonymized trading were remarkably resilient during the recent crises. We use the full transaction level dataset on all repo trades on Eurex Repo, including identifiers for market participants, to provide a detailed description of the …Read More

Vera Demary, Barbara Engels, (2016), “Collaborative Business Models and Efficiency – Potential Efficiency Gains in the European Union”, Cologne Institute for Economic Research, Impulse Paper No. 07, 29 April With the advent of the all-embracing digitization, the internet-based collaborative economy, which harnesses the power of technology to connect people in transactions, is on the rise. It provides services in a different way than traditional economies: Traditional service providers typically adopt a pipe-like business …Read More

Bernd Schwaab, Siem Jan Koopman, André Lucas, (2016), “Global credit risk: world, country and industry factors”, ECB Working Paper 1922, June We investigate the dynamic properties of systematic default risk conditions for firms in different countries, industries and rating groups. We use a high-dimensional nonlinear non-Gaussian state space model to estimate common components in corporate defaults in a 41 country sample between 1980Q1–2014Q4, covering both the global financial crisis and euro area …Read More

Arestis, Philip, Phelps, Peter, (2016),  “Endogeneity Analysis of Output Synchronization in the Current and Prospective EMU”, Journal of Common Market Studies, Volume 54, Issue 3, Μay The sustainability of European EMU (economic and monetary union) remains an important issue in light of existing plans for enlargement. This article conducts an endogeneity analysis of output synchronization, based on panel data estimation from 1994 to 2013, for different country-groups, including core, periphery, central and eastern European countries, …Read More

Glick, Reuven, Rose, Andrew K., (2016), “Currency unions and trade: A post-EMU reassessment”, European Economic Review, June In our European Economic Review (2002) paper, we used pre-1998 data on countries participating in and leaving currency unions to estimate the effect of currency unions on trade using (then-) conventional gravity models. In this paper, we use a variety of empirical gravity models to estimate the currency union effect on trade and exports, using recent …Read More

Esther Ademmer, Ferdinand Drehe, (2016), “Constraining Political Budget Cycles: Media Strength and Fiscal Institutions in the Enlarged EU”, JCMS, Volume 54, Issue 3, May This article revisits institutional constraints to political budget cycles (PBCs) in the enlarged European Union (EU). Based on a panel of 25 Member States, we show that governments frequently fiscally stimulate the economy prior to elections. We argue that the occurrence of PBCs in the enlarged EU can be …Read More