Wolf, M., (2013), “Why Draghi was right to cut rates”, The Financial Times, 12 November. Τhe monetary policy of the European Central Bank has been too tight. This is shown in the fall of core annual inflation to just 0.8 per cent in the year to October 2013. The case for the monetary easing undertaken last week was overwhelming. Indeed, it was long overdue. Yet, it has been leaked, the …Read More

Buchheit, L., Weder di Mauro, B., Gelpern, A.,  Gulati, M., Panizza, U. and Zettelmeyer, J., (2013), “Revisiting sovereign bankruptcy”, VoxEU, 12 November. Sovereign-debt crises occur regularly and often violently. The recent debt crisis in Greece almost led to the collapse of the euro. Yet, there is no legally and politically recognised procedure for restructuring the debt of bankrupt sovereigns. Procedures of this type have been periodically debated – most recently, …Read More

Krugman, P., (2013), “Germany’s lack of reciprocity”, The New York Times, 12 November. Huge tensions over the ECB rate cut, with a split on the board and many German economists protesting. As usual, a lot of it is about the perception that those lazy southern Europeans are getting a free ride: A commentary by the chief economist of the financial weekly Wirtschaftswoche called the decision a “diktat from a new …Read More

Münchau, W., (2013), “The eurozone needs to get inflation up again”, The Financial Times, 10 November. What surprised me last week was not the European Central Bank’s decision to cut interest rates, but that so few people had expected it. That is astonishing since the ECB is certain to fall short of its inflation target – achieving an annual rate of close to 2 per cent in the medium term. …Read More

Rehn, O., (2013), “Turning Germany’s surplus into a win-win for the Eurozone”, Olli Rehn’s blog, 11 November. Germany’s current account surplus has been a subject of heated debate for some time. On the one side, there are regular calls for the country to reduce its surplus through fiscal stimulus, to lift southern Europe from its doldrums. On the other side, in Germany these calls are often regarded as jealous attacks …Read More

Bornhorst, F. and Ruiz Arranz, M., (2013), “The perils of private-sector deleveraging in the Eurozone”, VoxEU, 10 November. Private and public debt in the Eurozone increased since the 2000s, and especially so in certain countries. This column presents evidence that high levels of private and public debt, together with deleveraging of all sectors, are especially harmful for economic growth. Private sector debt is more detrimental to growth than public sector …Read More