Clements, B., Coady, D., De Mooij, R. & Gupta, S. (2014) “Taxing, spending, and inequality – what is to be done?“, VoxEU Organisations, 15 April. The causes and consequences of rising inequality have stirred a lively debate on appropriate policy responses. This column reviews how governments have successfully used fiscal policy to address distributive concerns. It also examines the policy alternatives that countries can pursue in order to reduce …Read More
‘There will be growth in the spring’: How well do economists predict turning points?
Ahir, H. & Loungani, P. (2014) “‘There will be growth in the spring:’ How well do economists predict turning points?“, VoxEU Organisation, 14 April. Forecasters have a poor reputation for predicting recessions. This column quantifies their ability to do so, and explores several reasons why both official and private forecasters may fail to call a recession before it happens. Since the onset of the Great Recession, much of the …Read More
Government wages and labour market outcomes
European Commission (2014) “Government wages and labour market outcomes”, European Economy. Occasional Papers, April 2014: Brussels. As most European countries are trying to consolidate public finances, whilst also attempting to improve cost competitiveness for external rebalancing and abate unemployment, it is crucial to assess government wage formation, its outcomes and interaction with private sector labour costs. This paper provides an overview of government wage setting regimes, an empirical analysis …Read More
What drives the German current account? And how does it affect other EU member states?
Kollmann, R., Ratto, M., Roeger, W., In’t Veld, J. & Vogel, L. (2014) “What drives the German current account? And how does it affect other EU member states?”, European Economy, Economic Papers, April 2014. We estimate a three-country model using 1995-2013 data for Germany, the Rest of the Euro Area (REA) and the Rest of the World (ROW) to analyze the determinants of Germany’s current account surplus after the …Read More
Losing Interest
Eichengreen, B. (2014) “Losing Interest“, Project Syndicate, 11 April. BERKELEY – Two of the world’s most prominent economic institutions, the International Monetary Fund and Former US Treasury Secretary Larry Summers, recently warned that the global economy may be facing an extended period of low interest rates. Why is that a bad thing, and what can be done about it? Adjusted for inflation, interest rates have been falling for three …Read More
The increasing competiveness of the southern Eurozone
Auer, R. (2014) “The increasing competiveness of the southern Eurozone“, VoxEU Organisation, 11 April. Some view the improvements in current accounts for Greece, Italy, Portugal, and Spain as short-lived – the result of a temporary compression of import demand that is likely to be reversed as the recession eases. This column argues the contrary, based on the fact that their improving trade balances reflect better export performance. This development …Read More
The proposed EU Financial Transactions Tax is both illogical and likely to be economically damaging
Grahl, J. & Lysandrou, P. (2014) “The proposed EU Financial Transactions Tax is both illogical and likely to be economically damaging“, LSE EUROPP, 09 April. In 2011, the European Commission proposed a Financial Transactions Tax (FTT) to raise revenue from the financial sectors in EU countries following the financial crisis. To date, however, only 11 EU states have so far agreed to implement such a tax. John Grahl and …Read More
Europe’s Bogus Banking Union
Legrain, P. (2014) “Europe’s Bogus Banking Union“, Project Syndicate, 08 April. LONDON – After a 16-hour marathon negotiating session ending on March 20, politicians, technocrats, and journalists were all keen to declare the deal on the final piece of Europe’s banking union a success. But appearances are deceptive. While the “banking union” may soon exist on paper, in practice the eurozone banking system is likely to remain fragmented along …Read More
Estimating the impact of changes in aggregate bank capital requirements during an upswing
Noss, J. & Toffano, P. (2014) “Estimating the impact of changes in aggregate bank capital requirements during an upswing“, VoxEU Organisations, 06 April. The impact of tighter regulatory capital requirements during an economic upswing is a key question in macroprudential policy. This column discusses research suggesting that an increase of 15 basis points in aggregate capital ratios of banks operating in the UK is associated with a median reduction …Read More
The eye, the needle and the camel: Rich countries can benefit from EU membership
Campos, F. N., Coricelli, F. & Moretti, L. (2014) “The eye, the needle and the camel: Rich countries can benefit from EU membership“, VoxEU Organisation, 05 April. One concern with EU enlargement is that relatively poorer countries benefit more from becoming members. This column uses data from the 1973 and 1995 enlargements to show that richer countries also benefited a lot from joining the EU. Per capita incomes would …Read More