Garcia-de-Andoain, Carlos, Heider, Florian, Hoerova, Marie, Manganelli, Simone, (2016), “Lending-of-last-resort is as lending-of-last-resort does: Central bank liquidity provision and interbank market functioning in the euro area“, European Central Bank Working Paper, No 1886, February. This paper investigates the impact of ample liquidity provision by the European Central Bank on the functioning of the overnight unsecured interbank market from 2008 to 2014. We use novel data on interbank transactions derived from TARGET2, the main euro area payment …Read More

Bénassy-Quéré, Agnès, Ragot, Xavier, Wolff, Guntram B., (2016), “Which fiscal union for the euro area?“, Bruegel Publications, Issue 2016/05, 18 February. At the current level of political and societal integration, a large federal budget is unrealistic in the euro area. The authors make three recommendations that would lead national fiscal policies to be more stabilising with respect to the economic cycle, while achieving long-term sustainability. They also recommend a move towards a European unemployment insurance scheme …Read More

Attinasi Grazia, Maria, Metelli, Luca, (2016), “Is fiscal consolidation self-defeating? A Panel-VAR analysis for the Euro area countries”, European Central Bank Working Paper, No. 1883, February This paper studies the effects of fiscal consolidation on the debt-to-GDP ratio of 11 Euro area countries. Using a quarterly fiscal Panel VAR allows us to trace out the dynamics of the debt-to-GDP ratio following a fiscal shock and to disentangle the main channels …Read More

Dimova, Dilyana, Kongsamut, Piyabha, Vandenbussche, Jérôme, (2016), ” Macroprudential Policies in Southeastern Europe”, IMF Publications, 15 February This paper presents a detailed account of the rich set of macroprudential measures taken in four Southeastern European countries—Bulgaria, Croatia, Romania, and Serbia—during their synchronized boom and bust cycles in 2003–12, and assesses their effectiveness. We find that only strong measures helped contain domestic credit growth, the share of foreigncurrency- denominated loans provided by the domestic banking sector, or …Read More

Heathcote, Jonathan, Perri, Fabrizio, (2016), “On the Desirability of Capital Controls”, Centre for Economic Policy Research, January. In a standard two-country international macro model, we ask whether imposing restrictions on international non contingent borrowing and lending is ever desirable. The answer is yes. If one country imposes capital controls unilaterally, it can generate favorable changes in the dynamics of equilibrium interest rates and the terms of trade, and thereby benefit at the expense of …Read More

Brendon, Charles, Corsetti, Giancarlo, (2016), “COEURE Survey: Fiscal and Monetary Policies after the Crises“, Centre for Economic Policy Research, January. We review the recent literature on macroeconomic stabilisation policy, with a particular focus on two major challenges that are particular to the post-crisis land- scape. These are, first, how to provide meaningful economic stimulus when the zero lower bound on nominal interest rates is binding. Second, how to design a stabilisation policy for the …Read More