Boumparis, Periklis, Milas, Costas, Panagiotidis, Theodore, (2015), “Has the crisis affected the behavior of the rating agencies?-Panel Evidence from the Eurozone”, University of Macedonia, Discussion Paper No. 4/2015, November We examine the determinants of credit ratings for the Eurozone countries over the period 2002-2013 within a panel framework that allows for cross-sectional dependence. We find that government debt and the cumulative current account exert a stronger impact on ratings post- 2008 compared to …Read More

Adam, Antonis, Hatzipanayotou, Panos, Moutos, Thomas, (2015), “Labour Market Regulation, Fiscal Consolidation, and the Success of Current Account Adjustments”, AUEB Working Paper Series 15-17, October In this paper we argue that the strictness of labour market regulations can interact with the mode of fiscal consolidation (tax- based versus spending-based fiscal adjustments) to affect whether current account adjustments are successful. Using data from 81 countries, we are able to identify 147 episodes …Read More

Blanchard, Olivier, Cerutti, Eugenio, Summers, Lawrence, (2015), “Inflation and Activity – Two Explorations and their Monetary Policy Implications”, IMF Working Paper, WP/15/230, November We explore two issues triggered by the crisis. First, in most advanced countries, output remains far below the pre-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 …Read More

Ben Cheikh, Nidhaleddine, Rault, Christophe, (2015), “The Pass-Through of Exchange Rate in the Context of the European Sovereign Debt Crisis”, IZA, October. This paper investigates whether exchange rate pass-through (ERPT) into import prices is a nonlinear phenomenon for five heavily indebted Euro area countries, namely the so-called GIIPS group (Greece, Ireland, Italy, Portugal, and Spain). Using logistic smooth transition models, we explore the existence of nonlinearity with respect to sovereign …Read More

Ilzetzki, Ethan, (2015), “A Positive Theory of Tax Reform”, Centre for Economic Policy Research, November. The political impediments to reform and the forces allowing its success are studied in a model where the tax base and statutory rate are separate instruments of tax policy. The model predicts that big bang reforms—large changes in the tax code—may be easier to enact than marginal reforms. Preferences over the tax base face a tipping point …Read More

J. Blanchard, Olivier, David Ostry, Jonathan, R. Ghosh, Atish, Chamon, Marcos, (2015), ” Are Capital Inflows Expansionary or Contractionary? Theory, Policy Implications, and Some Evidence”, IMF Publications, Working Paper No. 15/226, 23 October The workhorse open-economy macro model suggests that capital inflows are contractionary because they appreciate the currency and reduce net exports. Emerging market policy makers however believe that inflows lead to credit booms and rising output, and the evidence appears to go their way. To reconcile …Read More

Funke, Manuel, Schularick, Moritz, Trebesch, Christoph, (2015), “Going to Extremes: Politics after Financial Crises, 1870-2014”, Centre for Economic Policy Research, October Partisan conflict and policy uncertainty are frequently invoked as factors contributing to slow post-crisis recoveries. Recent events in Europe provide ample evidence that the political aftershocks of financial crises can be severe. In this paper we study the political fall-out from systemic financial crises over the past 140 years. …Read More