Gros, Daniel, Pieter de Groen, Willem, (2015), “Will the Single Resolution Fund be a ‘baby tiger’ during the transition?”, Ceps publications, 17 December Even during its early years, the Single Resolution Fund (SRF) should be sufficient to deal with almost any crisis scenario imaginable. The funding for the SRF will be built up only gradually over the coming decade, however, and there is thus a legitimate concern that it will …Read More
Gros, Daniel, Baldwin, Richard, (2015), “What caused the eurozone crisis?”, Ceps publications, 27 November After five years of crisis there are now signs that the eurozone economy is recovering, but it is far from being back to normal. The authors of this CEPS Commentary sound a note of caution: although progress has been made with the banking union and new institutions like the European Stability Mechanism (ESM), more needs to …Read More
Mohlmann, Jan, Suyker, Wim, (2015), “An update of Blanchard’s and Leigh’s estimates in ‘Growth Forecast Errors and Fiscal Multipliers ’”, Voxeu, 1 Δεκεμβρίου Olivier Blanchard and Daniel Leigh’s work on growth forecast errors and fiscal multipliers in 2009-2011 has been highly influential. This column extends their approach to recent years. The authors do not find convincing evidence for stronger-than-expected fiscal multipliers for EU countries during the sovereign debt crisis (2012-2013) or during the …Read More
Camacho, Máximo, Leiva-Leon, Danilo, Pérez-Quirós, Gabriel, (2015), “Monetary policy expectations and aggregate EZ shocks”, Voxeu, 1 December Today’s monetary policy effectiveness depends on expectations of future monetary policy. Shocks affect such expectations, but the nature of the shock matters. This column presents evidence that negative demand shocks lead markets to expect looser policy in the short run. Negative supply shocks lead to expectations of looser policy in the medium to long run. Unexpected expansions – …Read More
Daly, Kevin, Munday, Tim, (2015), “Accounting for differences in Europe’s post-Crisis growth”, Voxeu, 28 November The fallout from the Global Crisis and its aftermath has been deeply damaging for European output. This column uses a growth accounting framework to explore the pre-Crisis and post-Crisis growth dynamics of several European countries. The weakness of post-Crisis real GDP in the Eurozone manifested itself in a decline in employment and average hours worked. However, decomposing growth …Read More
Bofinger, Peter, (2015), “German wage moderation and the EZ Crisis”, Voxeu, 30 November The EZ ‘consensus narrative’ argues the Crisis should not be thought of as a government debt crisis in its origin. Instead it regards large intra-EZ capital flows that emerged in the decade before the Crisis as the real culprit. This column argues that while the narrative is correct, it is also incomplete. With its focus on the deficit …Read More
Janssen, Ronald, (2015), “Lost In Contradiction: The IMF And Competitive Wage Dumping In The Euro Area”, Social Europe Journal, 27 November A staff discussion note published recently by the IMF addresses the argument that squeezing wages across a large part of the euro area is dangerous and deflationary as it will not improve anyone’s relative competitive position while undercutting domestic demand everywhere. Since the IMF has always been a staunch …Read More
Bocchi, Alessandro Magnoli, (2015), “Ten Questions for the Global Economy”, Economonitor, 25 November. The fundamental structure of the world economy is changing. While the contribution of services to global output is on the rise, investment and productivity remain stagnant, savings keep accumulating, and growth and inflation decline. Meanwhile, globalization has increased co-dependence: a rising number of countries can influence the world’s economic performance and its financial stability. Yet, the international monetary system …Read More
S. Gürkaynak, Refet, Davig, Troy (2015), “Perils of central banks as policymakers of last resort”, Voxeu, 25 November Central banks around the world have been shouldering ever-increasing policy burdens beyond their core mandate of stabilising prices. This column considers the social welfare implications when central banks take on additional mandates that are usually the domain of other policymakers. Additional mandates are shown to worsen trade-offs faced by the central bank, while distorting …Read More
Portier, Jean, Sanfilippo, Luca, (2015), “Reviving Credit in the Euro Area”, IMF direct, 23 November A stock in excess of €900 billion of nonperforming loans continue to clutter the European banking system, impeding economic growth. This issue remains a key challenge for policy makers. As we show in our latest Global Financial Stability Report,part of the solution to address this legacy is an upgrade in legal systems. Current inefficiencies—long foreclosure times …Read More
