Sayek, S. & Taskin, F. (2014) “Lessons from history for the European Financial Crisis“, VoxEU Organisation, 05 July.   The European Monetary Union is unprecedented, but the Eurozone Crisis is not. This column draws upon the experiences of previous banking crises, and compares the Eurozone Crisis countries. Like Japan before the 1992 crisis, Spain and Ireland had property bubbles fuelled by domestic credit. The Greek crisis is very distinct from …Read More

Berger, D. & Vavra, J. (2014) “Durable consumption during recessions“, VoxEU Organisation, 03 July.   Various stimulus programmes have been implemented in a response to the decline in consumption of durables since the Recession. This column argues that standard analysis of such programmes could be overstating their effectiveness. Aggregate durable spending is much less responsive to stimulus during recessions. Microeconomic frictions lead households to adjust their durable holdings less frequently. …Read More

Borio, C. & Disyatat, P. (2014) “Low interest rates and secular stagnation: Is debt a missing link?“, VoxEU Organisation, 25 June.   Real interest rates have fallen to historic lows, and some economists are concerned that an era of secular stagnation has begun. This column highlights the role of policy frameworks and financial factors – particularly debt – in linking low real interest rates and sluggish economic growth. Policies that …Read More

Ball, L. (2014) “The Great Recession’s long-term damage“, VoxEU Organisation, 01 July.   Whereas textbook macroeconomic theory suggests that output should return to potential after a recession, there is mounting evidence that deep recessions have highly persistent effects on output. This column reports estimates of the long-term damage caused by the Great Recession. In most countries in the sample, the loss of potential output – 8.4% on average – has …Read More