Schoenmaker, Dirk, Véron, Nicolas, (2016), “European banking supervision: compelling start, lingering challenges”, Bruegel, 8 June The new European banking supervision system is broadly effective and, in line with the claim often made by its leading officials, tough and fair, but there are significant areas for future improvement. European banking supervision (also known as the Single Supervisory Mechanism) is the first step in Europe’s banking union. Some 18 months after its official start on …Read More

Emmott, Bill, (2016), “Let’s Get Fiscal”, Project Syndicate, 8 June Everyone knows there is no gain without pain. But there can be pain without gain – a lesson that Western populations have been learning the hard way since at least 2012. With years of fiscal austerity in the United States, Europe, and Japan having achieved nothing, it is time for governments to start spending again. The proposal will be met with outrage …Read More

Gros, Daniel, (2016), “IMF Go Home”, Project Syndicate, 8 June The curtains are up on another act of the Greek debt drama. Eurozone finance ministers and the International Monetary Fund have agreed with Greece to begin, per the IMF’s demands, providing some debt relief to the country, and to release €10.3 billion ($11.6 billion) in bailout funds. Greece, for its part, has agreed to another round of austerity and structural reform. …Read More

Bofinger, Peter, (2016), “German macroeconomics: The long shadow of Walter Eucken”, Voxeu, 7 June At first sight, it is difficult to explain why the macroeconomic debate and macroeconomic policy in Germany differ considerably from other countries, despite the same academic textbooks and models being used as elsewhere. This column explains how a specific paradigm of macroeconomics, developed by Walter Eucken and diametrically opposed to Keynesian economics, is behind the German formal …Read More

Claeys, Grégory, Leandro, Álvaro, (2016), “The Juncker plan needs to be turned on its head”, Bruegel, 8 June The ‘Investment Plan for Europe’, also known as the Juncker Plan, was approved in June 2015 and the European Fund for Strategic Investments (EFSI) launched immediately after. The objective of the plan is to overcome the current lack of investment in the EU, but the initiative has got off to a disappointing start. Relevant …Read More

Wickens, Mike, (2016), “Avoiding another Eurozone Crisis while avoiding the Five Presidents’ Report: Part II”, Voxeu, 8 June This second column in a two-part series takes a closer look at the proposals in the Five Presidents’ Report for Fiscal, Banking, and Capital Markets Unions and much closer political integration among Eurozone countries. It goes on to give evidence of the failure of financial markets to price risk correctly prior to the …Read More

Blanchard, Olivier, (2016), “How to Teach Intermediate Macroeconomics after the Crisis?”, Peterson Institute for International Economics, 2 June Having just concluded a seven-year run as chief economist of the International Monetary Fund, and having to rewrite the seventh edition of my undergraduate macroeconomics book (link is external) , I had to confront the issue: How should we teach macroeconomics to undergraduates after the crisis? Here are some of my conclusions (I …Read More

Wickens, Mike, (2016), “Avoiding another Eurozone Crisis while avoiding the Five Presidents’ Report: Part I”, Voxeu, 7 June European Monetary Union was designed to promote economic growth, price stability, full employment, and political integration. It can be argued that so far, it has achieved none of these and has in fact made things worse.  The Five Presidents’ Report contained a set of proposals for making the single currency sustainable, based on …Read More

De Grauwe, Paul, Ji, Yuemei, (2016), “Synchronisation in business cycles: An endogenous explanation”, Voxeu, 7 June There is a high degree of correlation between the business cycles of different countries. This is particularly the case in the Eurozone, but also among industrialised countries outside of the Eurozone. Using a two-country behavioural macroeconomic model, this column shows that the main channel for the synchronisation of business cycles is the propagation of ‘animal …Read More