Gelos, Gaston, Valckx, Nico, (2016), “The insurance sector and systemic risk”, Voxeu, 27 July In recent years, the life insurance sector has become more systemically important across advanced economies. This increase is largely due to growing common exposures and to insurers’ rising interest rate sensitivity. This column analyses the evolution of the insurance sector’s contribution to systemic risk. Overall, life insurers do not seem to have markedly changed their asset portfolios …Read More

Scarpetta, Stefano, Keese, Mark, Swaim, Paul, (2016), “Back in work, still out of pocket: Labour market recovery since the Great Recession”, Voxeu, 25 July The labour market recovery in OECD countries has been steady but slow since the Great Recession. More worrying is the fate of wage growth over the same period. This column assesses the implications of stagnation in the labour market for growth, wages, and inequality. It finds that …Read More

Seikel, Daniel, (2016), “The European Union In Crisis – Is Flexible Integration The Way Forward?”, Social Europe, 22 July The UK’s Brexit referendum is the latest and most eminent manifestation of the European Union’s severe crisis of legitimacy. An ever-increasing number of Europeans fundamentally question European integration. Without legitimacy – i.e. the acceptance and support of the Europeans – the EU has no future. The right lesson to draw is that …Read More

Guriev, Sergei, Speciale, Biagio, Tuccio, Michele, (2016), “How do regulated and unregulated labor markets respond to shocks? Evidence from immigrants during the Great Recession”, Centre for Economic Policy Research, July We study wage adjustment during the recent crisis in regulated and unregulated labor markets in Italy. Using a unique dataset on immigrant workers, we show that before the crisis wages in the formal and informal sectors moved in parallel (with a …Read More

Lemoine, Matthieu, Lindé, Jesper, (2016), “Fiscal Consolidation Under Imperfect Credibility”, Centre for Economic Policy Research, July This paper examines the effects of expenditure-based fiscal consolidation when credibility as to whether the cuts will be long-lasting is imperfect. We contrast the impact limited credibility has when the consolidating country has the means to tailor monetary policy to its own needs, with the impact when the country is a small member of a …Read More

Eggertsson, Gauti B, Summers, Lawrence H., (2016), “Secular stagnation in the open economies: How it spreads, how it can be cured”, Voxeu, 22 July The secular stagnation hypothesis suggests that low interest rates may be the new normal in years to come. This column argues that this prospect should not only lead to a major rethinking of policy from the perspective of individual economies, but also a major rethinking about monetary …Read More

Andritzky, Jochen, Feld, Lars P, Schmidt, Christoph M, Schnabel, Isabel, Wieland, Volker, (2016),  “Creditor participation clauses: Making orderly sovereign debt restructuring feasible in the Eurozone”, Voxeu, 21 July To make the no-bailout clause credible and to enhance the effectiveness of crisis assistance, private creditors should contribute to crisis resolution in the Eurozone. This column proposes a mechanism to allow for orderly restructuring of sovereign debt as part of ESM programmes. If debt exceeds certain thresholds, …Read More

Minenna, Marcello, (2016), “The ECB At A Dangerous Crossroad As Berlin Endangers QE”, Social Europe, 20 July In the stormy aftermaths of Brexit, with Eurozone stock markets losing 8% on average and Sterling crashing, government bonds have remained substantially unperturbed. The ECB shield, in the form of the €80 billion of Public Sector Purchase Program (PSPP) monthly asset purchases, has been remarkably effective and has reduced volatility to the bare minimum. …Read More

Darvas, Zsolt, (2016), “Single market access from outside the EU: three key prerequisites”, Bruegel, 19 July In relative terms, Norway’s current net financial contribution to the EU is similar to the UK’s. Switzerland and Liechtenstein pay surprisingly little, while Iceland is a net beneficiary. Relative to their population, Switzerland, Norway, Iceland and Liechtenstein received about twice as large an inflow of EU immigrants as the UK. These countries also have to …Read More

Di Maggio, Marco, Kacperczyk, Marcin, (2016), “The unintended consequences of the zero lower bound policy for the money market funds industry”, Voxeu, 19 July The zero lower bound policy for nominal interest rates was implemented to stimulate sluggish economic growth and boost employment. This column explores whether this policy had unintended effects on the money market fund industry. Traditionally enjoying relatively low and safe returns, money market funds could respond to the low …Read More