Wolff, B. G. (2014) “Europe needs new investment, not new rules – the EU must avoid another useless fight over its fiscal rules and instead use political capital to foster growth“, Bruegel Institute, 25 June. As the European Council meets in Brussels this week, the big debate on what a new policy deal for Europe could look like has re-emerged. Opponents group themselves around the famous “stability” vs “growth” …Read More
Fontagné, L., Mohnen, P. and Wolff, G. (2014), ” No Industry, no Future?“, Bruegel, 19 June. In a context of weak growth, high unemployment, unbalanced public finances and persistent external deficit,we are witnessing the return of a proactive approach to industrial policy and, even in France the return of direct intervention in industry. Sector-focused public intervention is thus once again conceivable, while industry is once more perceived as a reservoir …Read More
M. Buch, C., Chapman, J. & Goldberg, L. (2014) “Transmission of liquidity risk through global banks: An International Banking Research Network project“, VoxEU Organisation, 24 June. The international transmission of liquidity shocks is one of the key questions of banking globalisation. This column discusses a project of central bank researchers from around the world who have been exploring the role of global banks in the transmission of liquidity shocks. …Read More
Kerry, W., Portier, J., Ruggerone, L. & Verkoren, C. (2014) “What a Drag: The Burden of Nonperforming Loans on Credit in the Euro Area“, iMFdirect, 23 June. High and rising levels of nonperforming loans in the euro area have burdened bank balance sheets and acted as a drag on bank profits. Banks, striving to maintain provisions to cover bad loans, have had fewer earnings to build-up their capital buffers. This …Read More
International Monetary Fund (2014) Global Financial Stability Report – Moving from Liquidity- to Growth-Driven Markets, World Economic and Financial Surveys, April. The April 2014 Global Financial Stability Report (GFSR) assesses the challenging transitions that the global financial system is currently undergoing on the path to greater stability. Chapter 1 finds that these transitions are far from complete, and stability conditions are far from normal. For advanced and emerging market economies …Read More
Darvas, Z. & Hüttl, P. (2014) “The long haul: debt sustainability analysis“, Working Paper – European Macroeconomics, Bruegel Association, 18 June. This working paper details and updates the debt sustainability analysis of Darvas, Sapir and Wolff (2014) for Greece, Ireland and Portugal. The goal is not the calculation of a baseline scenario which best corresponds to our views, but to set-up a baseline scenario which broadly corresponds to official …Read More
Illing, G. (2014) “Should the Euro Area Be Concerned About Deflation?“, INTERECONOMICS, Vol 49, No. 3· May/ June 2014. During the past few years, headline inflation (the change in the harmonised consumer price index, HCPI) in the euro area has fallen steadily, from three per cent at the end of 2011 to 0.7 per cent in April 2014. It is now far below the ECB’s target rate of inflation …Read More
Orphanides, A. (2014) “The Euro Area Crisis: Politics Over Economics“, MIT Sloan Research Paper No. 5091-14, 10 June. This paper explores the dominant role of politics in decisions made by euro area governments during the crisis. Decisions that appear to have been driven by local political considerations to the detriment of the euro area as a whole are discussed. The domination of politics over economics has led to crisis …Read More
European Central Bank (2014) “Monthly Bulletin“, ECB Eurosystem, June. ECONOMIC AND MONETARY DEVELOPMENTS 1 THE EXTERNAL ENVIRONMENT OF THE EURO AREA The global economy remains on a gradual recovery path, although the growth momentum moderated somewhat in the first quarter of 2014 as a result of temporary factors mainly affecting the United States and China. As the adverse effects of these factors are gradually waning, global activity should gather …Read More
Kahn, R. (2014) “Lowflation: Should We Fear Stable Prices?“, Global Economics Monthly: June 2014, Council on Foreign Relations, 10 June. Overview: Bottom Line: Low inflation may be symptomatic of deeper problems, such as inadequate demand or central bank policy failures. The costs of low inflation could be high for European economies. There is a new Washington consensus, and it consists of a simple message: low inflation threatens the global …Read More
