Chitiu, Livia, (2016), “Reserve accumulation, inflation and moral hazard: Evidence from a natural experiment”, ECB Working Paper Series No. 1880, January This paper assesses whether international reserve accumulation can be inflationary because of moral hazard and incentive effects. It tests the hypothesis that an increase in international reserves may incentivise countries to become complacent and pursue less prudent policies due to the perceived safety provided by higher reserve holdings. Relevant …Read More

Dobler, Marc, Gray, Simon,  Murphy, Diarmuid, Radzewicz-Bak, Bozena, (2016), “The Lender of Last Resort Function after the Global Financial Crisis”, IMF Working Paper No. 16/10, 22 January The global financial crisis (GFC) has renewed interest in emergency liquidity support (sometimes referred to as “Lender of Last Resort”) provided by central banks to financial institutions and challenged the traditional way of conducting these operations. Despite a vast literature on the topic, central bank approaches and …Read More

Gros, Daniel, (2016), “Adjustment within the Euro Area: Is it all about competitiveness?”, CEPS,  Special Report No. 127, 25 January The key problem afflicting the eurozone today seems clear: the periphery experienced a large loss of competitiveness during the boom years. In order for these economies to recover, they must restore their competitiveness, ideally by increasing productivity. This contribution shows, however, that the story line is not that straightforward. The drivers of competitiveness …Read More

Duff, Andrew, (2016), “The Protocol of Frankfurt: a new treaty for the eurozone”, European Policy Centre, 12 January. At a time when the EU finds itself in a perfect storm of crises which it seems unable to overcome, a bold move is needed to reinvigorate the EU’s system of government and stave off the risk of disintegration. In order to address the inherent weakness of the EU’s monetary and economic governance, …Read More

Blanchard, Olivier, (2016), “The US Phillips Curve: Back to the 60s?”, Peterson Institute for International Economics, January. Blanchard reexamines the behavior of inflation and unemployment and reaches four conclusions: (1) Low unemployment still pushes inflation up; high unemployment pushes it down. Put another way, the US Phillips curve is alive. (2) Inflation expectations, however, have become steadily more anchored, leading to a relation between the unemployment rate and the level of inflation …Read More