Ilzkovitz, Fabienne, Dierx, Adriaan, (2016), “Competition policy and inclusive growth”, Voxeu, 19 June Firms with greater market power can behave monopolistically, and recent research suggests that declining market competitiveness is driving income inequality. While competition authorities already measure the overall impact of their interventions by using customer savings, these measurements do not account for indirect effects of intervention. This column introduces a DSGE model to model competition policy interventions as a negative …Read More

Eisenbach, Thomas, Lucca, David, Townsend, Robert, (2016), ” The economics of bank supervision: Theory and evidence “, Voxeu, 17 June 2016,  The two main elements of bank industry oversight are regulation and supervision. This column provides a framework for thinking about supervision in relation to regulation. Using US data on supervisory hours spent, it finds evidence of economies of scale for bank size. Additionally, less risky banks receive substantially lower amounts of supervisory hours. The findings …Read More

Mishra, Prachi, (2016), “Rules of the monetary game”, VoxEU, 16 June All monetary policies have external spillover effects. However, the domestic mandates of most central banks may not legally allow them to take spillovers into account, and may force them to undertake aggressive policies so long as they have some small positive domestic effect. This column looks at the rules of the game for responsible policy in such a context. It …Read More

Eichengreen, Barry, (2016), “Financial Scarcity Amid Plenty”, Project Syndicate, 14 June With interest rates at all-time lows and central banks buying everything that moves, the world is awash with credit. Yet, paradoxically, a dangerous shortage of international liquidity is putting the global economy at risk. “International liquidity” refers to high-quality assets accepted around the world for paying import bills and servicing foreign debts. These are the same assets that central banks use …Read More

Ferrett, Ben, Hoefele, Andreas, Wooton, Ian, (2016), “Does tax competition make mobile firms more footloose?”, Centre for Economic Policy Research, June Existing analyses of fiscal competition for foreign direct investment (FDI) often assume a one-shot interaction between governments and the firm within a static environment where the firm makes a permanent location choice. We examine a two-period regional model where economic geography evolves, giving the firm an incentive to relocate between periods. Government competition …Read More

Demertzis, Maria, (2016), “Are central bank(er)s still credible?”, Bruegel, 14 June Both the Fed and the ECB have managed to remain credible since the financial crisis, but their credibility levels have evolved differently. Since inflation in the US and the euro area has been similar in the past 8 years, the difference in the way that credibility has evolved is the result of the different macroeconomic policy mix applied. Relevant Posts …Read More

Adair Turner, (2016), “A Tale of Two Debt Write-Downs”, Project Syndicate, 10 June At the end of 2015, Greece’s public debt was 176% of GDP, while Japan’s debt ratio was 248%. Neither government will ever repay all they owe. Write-offs and monetization are inevitable, putting both countries in a sort of global vanguard. With total public and private debt worldwide at 215% of world GDP and rising, the tools on which …Read More

Muellbauer, John, (2016), “Helicopter money and fiscal rules”, Voxeu, 10 June The Eurozone faces a lost decade or worse under current fiscal policy and restrictions on monetary policy. The ECB now faces a fundamental contradiction in its mandate between the Lisbon Treaty’s Article 127 (price stability, plus the ECB target of under but close to 2% inflation) and Article 123 (no overt monetary finance of governments). This article discusses three options …Read More

Leandro, Álvaro, (2016), “The use of ECB liquidity”, Bruegel, 9 June The Eurosystem’s regular open market operations consist of one-week liquidity-providing operations (MROs), and three-month liquidity-providing operations (LTROs). We have updated data on the use of these operations by country. Relevant Posts Ippolito, Filippo,  Peydró, José-Luis, Polo, Andrea, Sette, Enrico, (2016),  “Double bank runs, liquidity risk management, and Basel III”, Voxeu, 10 Μay Garcia-de-Andoain, Carlos, Heider, Florian, Hoerova, Marie, Manganelli, Simone, (2016), “Lending-of-last-resort is as lending-of-last-resort does: Central bank …Read More

De Groen, Willem Pieter, Maselli, Ilaria, (2016), “The Impact of the Collaborative Economy on the Labour Market”, CEPS, 3 June The digitalisation of work is creating new ways of intermediating work, with for example platforms intermediating work between individuals online. These so-called online collaborative platforms have the potential to fundamentally change the labour market, but for the moment, with an estimated 100,000 active workers or 0.05% of total employees in the …Read More