A. Bertasiute, D. Massaro, M. Weber, (2018), “The roles of economic integration and monetary policy in currency unions”, VoxEU, 7 July Macroeconomics has often been criticised for assuming rational expectations. Indeed, the assumption that all firms and consumers in an economy form their expectations in full awareness of all information and all underlying relationships in the economy is extremely unrealistic. Therefore, economists have started building macroeconomic models that are based …Read More

Natalie Chen, Dennis Novy, (2018), “Currency unions mean more trade, but not for everyone”, VoxEU, 9 July Currency unions are an important institutional arrangement to facilitate international trade and reduce trade costs. In the period since WWII, a total of 123 countries have been involved in a currency union at some point. By the year 2015, 83 countries continued to be involved in one. In addition, various countries are considering …Read More

G. Claeys, M. Demertzis & K. Efstathiou, (2018), “Cryptocurrencies and monetary policy”, Bruegel, 28 June This Policy Contribution tries to answer two main questions: can cryptocurrencies acquire the role of money? And what are the implications for central banks and monetary policy? Money is a social institution that serves as a unit of account, a medium of exchange and a store of value. With the emergence of decentralised ledger technology …Read More

Ambar Narayan, Roy Van der Weide, (2018) “Intergenerational mobility across the world: Where socioeconomic status of parents matters the most (and least)”, VoxEU, 2 July A society with high (relative) intergenerational mobility is one where an individual’s wellbeing, relative to others of his or her generation, is less dependent on the socioeconomic status of his or her parents. Arguably, there are two main reasons why higher relative mobility in a …Read More

George Papaconstantinou, (2018), “Learning from mistakes: A ‘what if’ approach to assessing proposals for euro area reform”, VoxEU, 21 June The policy discussion on euro area reform has entered a critical phase, and analytical contributions informing that discussion have become particularly important. Among these, the recent CEPR Policy Insight (Bénassy-Quére et al. 2018) stands out. It is an important contribution to the discussion which the European Commission kicked off institutionally …Read More

Javier Cravino, Ting Lan, Andrei Levchenko, (2018), “Differences in consumption baskets across households and the distributional consequences of monetary policy”, VoxEU, 16 June There is growing recognition that monetary policy shocks have distributional consequences. An active literature argues that monetary policy can have differential effects across various types of agents – savers versus borrowers (Doepke and Schneider 2006), the financially constrained versus the unconstrained (Williamson 2008), or young versus old …Read More

Eric Monnet, (2018), “Macroprudential tools, capital controls, and the trilemma: Insights from the Bretton Woods era”, VoxEU, 13 June Assessing how domestic monetary policy is constrained by international capital flows remains a key but open empirical and theoretical question (Farhi and Werning 2014, Shambaugh and Klein 2015, Rey 2016, Obtsfeld et al. 2017). It is often approached from the angle of the trilemma – the impossible trinity of international finance …Read More

B. Eichengreen, (2018), “The Populists’ Euro”, Project Syndicate, 12 June The majority of Italians want two things: new political leadership and the euro. The question is whether they can have both. The point about new leadership is uncontroversial. The country’s two ruling populist parties, the League and the Five Star Movement (M5S), together commanded 50% of the vote in the March 4 general election, and, as a result, have majorities …Read More