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The greatest reshuffle of individual incomes since the Industrial Revolution

Milanovic, Branko, (2016), “The greatest reshuffle of individual incomes since the Industrial Revolution”, Voxeu, 1 July The effects of of globalisation on income distributions in rich countries have been studied extensively. This column takes a different approach by looking at developments in global incomes from 1988 to 2008. Large real income gains have been made by people around the median of the global income distribution and by those in the global top …Read More

The public economics of long term care

Pestieau, Pierre, Ponthiere, Gregory, (2016), “The public economics of long term care”, Centre for Economic Policy Reseach, June With the rapid increase in LTC needs, the negligible role of the market and the declining role of informal family care, one would hope that the government would take a more proactive role in the support of dependent elderly, particularly those who cannot, whatever the reason, count on assistance from their family. The …Read More

Government as Borrower of First Resort

Chemla, Gilles, Hennessy, Christopher, (2016), “Government as Borrower of First Resort”, Centre for Economic Policy Research, June We examine optimal provision of riskless government bonds under asymmetric information and safe asset scarcity. Paradoxically, corporations have incentives to issue junk debt precisely when intrinsic demand for safe debt is high since uninformed investors then migrate to risky overheated debt markets. Uninformed demand stimulates informed speculation which drives junk debt prices closer to fundamentals, encouraging …Read More

Growing Older: Germany Needs Reforms

Detragiache, Enrica, Natal, Jean-Marc, Pereira, Joana, (2016), “Growing Older: Germany Needs Reforms”, IMFdirect, 29 Ιουνίου Germany, a champion of structural reform prescriptions within the European Union, needs a large dose of the same medicine at home, too. Beyond public investment in transport and telecommunications, and more competition in services, dealing with an aging population needs urgent attention. With the right policies, Germany can bring more people into the workforce—and for longer—to …Read More

Bail-in versus bail-out: The Atlante example from a systemic risk perspective

Giudici, Paolo, Parisi, Laura, (2016), “Bail-in versus bail-out: The Atlante example from a systemic risk perspective”, VoxEU, 3ο June In April 2016, Italian banks set up an equity fund intended to recapitalise troubled financial institutions in a ‘private bail-out intervention’ scenario, with a view to avoiding a bail-in under the European Bank and Recovery Resolution directive. This column analyses the main differences between a bail-in and a bail-out scenario. In particular, …Read More

Managing a successful UK-EU divorce, arousing the desire for union

Vitorino, António, (2016), “Managing a successful UK-EU divorce, arousing the desire for union”, Notre Europe Jacques Delors Institute, 28 June Οur President, António Vitorino, takes a stand on the main issues of the European Council of the 28-29 June 2016 by answering questions on the British referendum on the EU and its consequences, the Juncker Plan, the refugee crisis and the European security strategy. Relevant Posts Olivier, Blanchard, (2016), “How the Eurozone Can …Read More

Credibility of central bank(er)s

Demertzis, Maria, Viegi, Nicola, (2016), “Credibility of central bank(er)s”, VoxEU, 28 June Both the Fed and the ECB have managed to remain credible since the Global Crisis, but their credibility levels have evolved differently. This column argues that since inflation in the US and the Eurozone has been similar in the past eight years, the difference in the way that credibility has evolved is the result of the different macroeconomic policy …Read More

Europe: a question of survival

Grevi, Giovanni, (2016), “Europe: a question of survival”, European Policy Centre, 27 June The choice of the United Kingdom to leave the European Union (EU) poses a fundamental question that can no longer be avoided – that of the survival of European integration. Chancellor Merkel rightly defined Brexit as a “watershed” moment for Europe. She omitted, however, that beyond this turning point lies the crossroads between a spiral of political and …Read More

The Political Economy of Public Debt: A Laboratory Study

Battaglini, Marco, Nunnari, Salvatore, Palfrey, Thomas R, (2016), “The Political Economy of Public Debt: A Laboratory Study”, Centre for Economic Policy Research, June This paper reports the results from a laboratory experiment designed to study political distortions in the accumulation of public debt. A legislature bargains over the levels of a public good and of district specific transfers in two periods. The legislature can issue or purchase risk-free bonds in the first period and …Read More

How the Eurozone Can Be Strengthened After Brexit

Olivier, Blanchard, (2016), “How the Eurozone Can Be Strengthened After Brexit”, Peterson Institute for International Economics, 27 June exit raises fundamental questions, about the course of history, the nature of relations between European countries, the rise of populists, and the devalued status of politicians. These will be analyzed at length for months and years to come. Meanwhile, Europe must continue to function. Both the European Union and eurozone projects have to …Read More