Berka, Martin, Devereux, Michael B., (2013), “Trends in European real exchange rates” , Economic Policy, Vol. 28, Issue 74, p.p. 193-242. We study a newly created panel data set of relative prices for a large number of consumer goods among 31 European countries over a 15-year period. The data set includes eurozone members both before and after the inception of the euro, floating exchange rate countries of Western Europe, and …Read More
Bibow, Jorg, (2013), “On the Franco-German Euro Contradiction and Ultimate Euro Battleground” , Levy Economics Institute of Bard College, Working Paper, N.762. Highlighting that France and Germany held largely contradicting hopes and aspirations for Europe’s common currency, this paper analyzes how the resulting euro contradiction conditioned the ongoing euro crisis as well as current strategies to resolve it. While Germany generally prevailed in hammering out the design of the euro policy …Read More
Gros, Daniel, (2013), “The Meaning of Cyprus: Moving towards banking union?” CEPS, 8 April. While acknowledging that Cyprus is too small to matter for global financial markets, this Commentary finds that its case could turn out to become a very important precedent for the way European policy-makers deal with future banking problems and the plans for a ‘banking union’.
Dell’ Ariccia, Giovanni, Goyal, Rishi, Koeva-Brooks, Petya, Tressel, Thierry, (2013) “A banking union for the Eurozone”, www.voxeu.org , 5 April. The crisis has highlighted the need for, and difficulties with, a Eurozone banking union. This column argues that, to make a union, you need three crucial ingredients: common supervision, a single resolution mechanism, and common safety nets. The power to control and the resources to rescue must work in parallel. …Read More
Aslund, Anders, (2013), “The Euro Crisis after Cyprus: What We Have Learned”, The Peterson Institute for International Economics, 3 April. Just as suddenly as it arose, the Cyprus financial crisis has passed by. The banks have opened and so has the stock market without undue panic. A few steps remain in the euro crisis, but this crisis is abating, and however messily Europe has handled it. Today, the questions are what …Read More
Scenario Team Eurozone 2020, (2013), “Future Scenarios for the Eurozone: 15 Perspectives on the Euro Crisis”, Friedrich Ebert Stiftung, March. The Eurozone is standing at a crossroads, facing the biggest challenges in its history: the systemic crisis and the political attempts to overcome it have far-reaching consequences for the future of the Economic and Monetary Union, European integration and Europe in the world. By identifying the main driving forces that …Read More
Pisani-Ferry, Jean, (2013), “The Politics of Moral Hazard”, www.project-syndicate.org, 30 March. It is an old and never-ending contest. On one side are the moral-hazard scolds, claiming that one of the major responsibilities confronting policymakers is to establish incentives that demonstrate that imprudent behavior does not pay. On the other side are the partisans of financial stability, for whom confidence in the financial system is too precious to be endangered, even …Read More
Blanchard, Olivier, Jaumotte, Florence and Loungani, Prakash, (2013), “Labor Market Policies and IMF Advice in Advanced Economies during the Great Recession”, International Monetary Fund, Staff Discussion Note, N.13/02. This paper does two things. First, it articulates what are the main implications of theoretical and empirical research for design of labor market policies and labor market institutions. Second, in this light, the paper analyzes the IMF’s labor market recommendations since the …Read More
Kirkegaard, Jacob, (2013), “Did Cyprus Set a Dangerous Precedent? Some Further Thoughts”, The Peterson Institute for International Economics, 29 March. The precedent of imposing losses on uninsured depositors in Laiki Bank and the Bank of Cyprus was a sound one, but that does not mean it will be a widely used one in the euro area—or that it puts the entire euro area banking system at risk of depositor runs. …Read More
Gros, Daniel, (2013), “Banking Union with a Sovereign Virus: The self-serving regulatory treatment of sovereign debt in the euro area”, The Centre for European Policy Studies, N.289. In many eurozone countries, domestic banks often hold more than 20% of domestic public debt, which is an unsatisfactory situation given that banks are highly leveraged and that sovereign debt is inherently subject to default risk within the euro area. This paper by …Read More
