Stiglitz, Joseph, (2016), “What’s Wrong With Negative Interest Rates?”, Social Europe, 13 April The fact is that the eurozone’s structure and the ECB’s policies have ensured that banks in the underperforming countries, and especially in the crisis countries, are very weak. Deposits have left, and the austerity policies demanded by Germany are prolonging the aggregate-demand shortfall and sustaining high unemployment. In these circumstances, lending is risky, and banks have neither the …Read More

Ligthart, Nick, Mody, Ashoka, (2016) ,”The ECB can make a difference if deeds match words”, Voxeu, 14 April On 10 March 2016, ECB President Mario Draghi announced new measures to stimulate economic activity and raise inflation in the Eurozone (Constâncio and Draghi 2016b). The action was prompted by the worry that ‘core’ inflation, which strips out volatile food and energy prices, has remained stubbornly close to, or under, an annual rate …Read More

Boot, Nuria, Wilson, Karen E., Wolff, Guntram B., (2016), “Youth unemployment in the Mediterranean region and its long-term implications”, Bruegel, 13 April Youth unemployment in the Mediterranean region has consequences for the whole of Europe. Tackling youth unemployment in the region must continue to be a high policy priority. Europe’s Mediterranean neighbourhood has become a focal point of attention due to the refugee crisis. With over a million people arriving in Europe in the …Read More

Persaud, Avinash, (2016), “Breaking the link between housing cycles, banking crises, and the recession”, Voxeu, 14 April Since the breakup of Bretton Woods in the early 1970s, the housing market has been at the centre of the biggest banking crises across the world. This column considers the nexus between housing, banking, and the economy, and how these ties can be broken. It argues for two modest regulatory changes in banking and …Read More

Borio, Claudio, Kharroubi, Enisse, Upper, Christian, Zampolli, Fabrizio, (2016), “Financial cycles, labour misallocation, and economic stagnation”, Voxeu, 14 April Some analysts claim that secular stagnation is responsible for the disappointing post-crisis economic performance. This column provides a different explanation that points to an unsuspected villain: the misallocation of resources (in our case, labour) during the pre-crisis financial boom and the long shadow it has cast post-crisis. The findings draw on an empirical analysis …Read More