Kaminsky, Graciela L., (2015), “Eurozone crisis: Looking back to the future”, Voxeu, 8 November The Eurozone crisis is still lingering. While in the last couple of months only Greece’s debt woes have been at the centre of public attention, vulnerabilities across countries in the Eurozone are not fading away. Europe is still mired in a long depression, and debt problems are still escalating. While it is true that Ireland, Portugal, and …Read More
Blanchard, Olivier, Cerutti, Eugenio, Summers, Lawrence, (2015), “Inflation and Activity – Two Explorations and their Monetary Policy Implications”, IMF Working Paper, WP/15/230, November We explore two issues triggered by the crisis. First, in most advanced countries, output remains far below the pre-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 …Read More
Weeks, John, (2015), “The Eurozone: Deflationary Boom Or Deflationary Bust?”, Social Europe Journal, 6 November. Several years ago the idea that fiscal austerity could induce growth, “expansionary austerity”, had a brief flowering before withering under the heat of ridicule. Recently it resurfaced under a different name, “deflationary boom”. If expansionary austerity was oxymoronic, deflationary boom is simply moronic. Relevant Posts Weeks, John, (2015), “Euro Deflation And How To Interpret It”, Social Europe …Read More
Gaspar, Vitor, Hagan, Sean, (2015), “Corruption : A Hidden Tax on Growth”, iMFdirect, 5 November. In recent years, citizens’ concerns about allegations of corruption in the public sector have become more visible and widespread. From São Paulo to Johannesburg, citizens have taken to the streets against graft. In countries like Chile, Guatemala, India, Iraq, Malaysia and Ukraine, they are sending a clear and loud message to their leaders: Address corruption! Relevant Posts Koulovatianos, Christos, Tsoukalas, …Read More
Barnichon, Régis, Garda, Paula, (2015), “Forecasting Unemployment across Countries: the Ins and Outs”, Centre for Economic Policy Research, November. This paper evaluates the flow approach to unemployment forecasting proposed by Barnichon and Nekarda (2012) for a set of OECD countries characterized by very different labor markets. We find that the flow approach yields substantial improvements in forecast accuracy over professional forecasts for all countries, with especially large improvements at longer horizons (one-year ahead …Read More
Alfani, Guido, Ryckbosch, Wouter, (2015), “Income inequality in pre-industrial Europe”, Voxeu, 6 November. Thomas Piketty and others have prompted renewed interest in understanding long-term patterns of inequality. This column presents evidence from pre-industrial Europe. Inequality rose even during the success stories of early modern Europe, but it can hardly have been the sole requisite for growth. In both economic history and today’s economic theory, the idea of a universal trade-off between growth and …Read More
Wray, L. Randall, (2015), “Why Minsky Matters: An Introduction to the Work of a Maverick Economist”, Princeton University Press, November. Perhaps no economist was more vindicated by the global financial crisis than Hyman P. Minsky (1919–96). Although a handful of economists raised alarms as early as 2000, Minsky’s warnings began a half-century earlier, with writings that set out a compelling theory of financial instability. Yet even today he remains largely outside …Read More
Ben Cheikh, Nidhaleddine, Rault, Christophe, (2015), “The Pass-Through of Exchange Rate in the Context of the European Sovereign Debt Crisis”, IZA, October. This paper investigates whether exchange rate pass-through (ERPT) into import prices is a nonlinear phenomenon for five heavily indebted Euro area countries, namely the so-called GIIPS group (Greece, Ireland, Italy, Portugal, and Spain). Using logistic smooth transition models, we explore the existence of nonlinearity with respect to sovereign …Read More
Aiyar, Shekhar, Ilyina, Anna, Jobst, Andreas, (2015), “How to tackle Europe’s non-performing loan problem”, Voxeu, 5 November. European banks are struggling with high levels of non-performing loans. This column explores the channels through which persistently high non-performing loans hold down credit growth and economic activity. A survey of EU authorities and banks reveals that the loans are not written-off for a variety of deep-seated reasons, including legal and tax code issues. An agenda is …Read More
Saraceno, Francesco, (2015), “The End Of German Hegemony – Really?”, Social Europe, 3 November. I was puzzled by Daniel Gros’ recent column in which he claims that Germany’s dominance of the EMU may be coming to an end. Gros’ argument is based on two facts. The first is the slowing growth rate of Germany, that seems to be heading towards the pre-crisis “normal” of slow growth (Germany grew less than the EMU …Read More
