Jochen Andritzky, (2018), “Enhancing the ESM lending toolkit through a precautionary credit line”, Bruegel, 11 June Transforming the European Stability Mechanism (ESM) into a “European Monetary Fund” has come to dominate the debate on euro area reforms, albeit no one has actually proposed it to become “monetary”. Instead, in a recent interview, Germany’s chancellor Angela Merkel raised the idea of a short-term credit facility for member states hit by external …Read More

Charles Goodhart, Michael Hudson, (2018), “Some ways to introduce a modern debt Jubilee”, 11 June One of today’s great social concerns is the increasing income and wealth inequalities within countries, although rapid growth in China and the rest of Asia has meant that global inequality has fallen (see Milanovic 2016). An influential book by Walter Scheidel, The Great Leveler, argues that inequality will rise inevitably unless one, or more, of …Read More

Peter Bofinger, (2018), “Digitalisation of money and the future of monetary policy”, VoxEU, 12 June Most economists will agree that the future of money will be more digital than today. But while everybody speaks of ‘digitalisation’, the concrete meaning of this term remains very often unclear. There are four major areas where digitisation could modify the traditional forms of money and credit and as consequence modify the theory and practice of …Read More

Ben Margulies, (2018), “What Italy’s political crisis told us about populism in Europe”, LSE EUROPP, 11 June Europe’s leaders and thinkers long feared the catastrophe that might ensue if Italy inaugurated a populist government. Then they feared the catastrophe that might ensue if Italy didn’t. To recap: On 4 March, Italy held a general election. Two populist parties, the radical-right populist Lega and the vaguely centrist Movimento Cinque Stelle (Five-Stars …Read More

ECB/The international role of the euro/June 2018 In 2017 and early 2018, the strong and broad-based growth momentum in the euro area economy as well as the continued impact of the ECB’s asset purchase programme were among the main developments affecting the international role of the euro. In this environment, the international use of the euro showed signs of broad stabilisation. For instance, the shares of the euro in global …Read More

Silvia Merler, (2018), “The Italian Crisis”, Bruegel, 4 June Ferdinando Giugliano notices how the Italian president has been cast as an enemy of democracy after his refusal to accept a eurosckeptic finance minister, while the anti-establishment League (La Lega) and the Five Star Movement (Movimento 5 Stelle or M5S) parties – who chose to blow up their attempt to form a government instead of proposing an alternative name – have …Read More

Arna Olafsson, Michaela Pagel, (2018), “The retirement-consumption puzzle: New evidence from personal finances”, VoxEU, 7 June A large academic literature in economics analyses changes in household consumption upon retirement. After all, household consumption is the most important part of aggregate demand and the increase in the share of the workforce that will be approaching or past retirement age in the coming years puts this topic at centerstage for both policymakers and …Read More

ECB (2018)/Monetary policy in a low interest rate environment/6 June Monetary policy plays an important role by creating an environment which facilitates the necessary structural adjustments, even if in itself it cannot address structural aspects of the economy. Indeed, by laying the groundwork for a return of inflation to our objective, our monetary policy measures have been supporting economic activity and have alleviated damage to the economy’s growth potential. Our …Read More

Mário Centeno, Miguel Castro Coelho, (2018), “The turnaround of the Portuguese economy: Two decades of structural changes”, VoxEU, 6 June In the run-up to introduction of the euro in 2002, perceptions about Portugal’s economic prospects and investment risk changed, resulting in a substantial increase in private debt and a mild domestic demand-led boom. The boom gave way, in the 2000s, to a decade of protracted growth, worsening labour market conditions, …Read More