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Europe’s Central Bank Is the World’s Most Important

Hatheway, Larry, (2017), “Europe’s Central Bank Is the World’s Most Important”, Bloomberg View, 7  June Over the next two weeks, investors will focus on monetary policy ahead of the European Central Bank meeting on June 8, which will be followed by the Federal Reserve on June 13-14. After a disappointing U.S. jobs report for May and amid signs of a regulatory crackdown on Chinese credit growth, fissures are appearing in …Read More

The Eurozone’s Hidden Strength

Gros, Daniel, (2017), “The Eurozone’s Hidden Strength”, Project Syndicate, 2 June For years, the eurozone has been perceived as a disaster area, with discussions of the monetary union’s future often centered on a possible breakup. When the British voted to leave the European Union last year, they were driven partly by the perception of the eurozone as a dysfunctional – and perhaps unsalvageable – project. Yet, lately, the eurozone has become …Read More

What the ECB Will Do This Week

El Erian, Mohamed A., (2017), “What the ECB Will Do This Week”, Bloomberg View, 7 June The European Central Bank has faced difficult decisions in recent years. It faces another one when its Governing Council meets on Thursday in Estonia. The decision will be a close one, at least it should be. And, once again, the euro zone’s central bank is likely to err on the side of significant prudence by avoiding any notable reduction in monetary stimulus — even …Read More

Simulating the impact of state-contingent debt instruments on sovereign finances: An Excel toolkit

Best, Tom, Dielmann, Christopher, Greene, Meghan, Mohd Nor, Tania, (2017), “Simulating the impact of state-contingent debt instruments on sovereign finances: An Excel toolkit”, Vox Eu, 5 June overeign state-contingent debt instruments (SCDIs) are instruments that link the issuer’s contractual debt service obligations to a pre-defined state variable, and are designed to alleviate pressure on sovereign finances in bad states of the world. While several previous studies (e.g. Barr et al. 2014, …Read More

Seizing the moment for euro area reform: A three-step action plan

Enderlein, Henrik, Letta, Enrico, De Geus, Aart, (2017), “Seizing the moment for euro area reform: A three-step action plan”, EUROPP, June The election of Emmanuel Macron as French President on 7 May gave renewed hope to proponents of the European integration project after the hammer blow of Brexit and fears about a sustained revival of populism. There is momentum in Berlin and Paris now behind the belief that the euro is incomplete …Read More

The economic consequences of family policies

Olivetti, Claudia, Petrongolo, Barbara, (2017), “The economic consequences of family policies”, Vox Eu, 3 June All high-income countries, as well as several developing countries, have policies in place to support work–family reconciliation, such as parental leave, childcare support, and flexible work arrangements, to name a few. The impact of these policy provisions on the labour market outcomes of parents, and especially mothers, is actively debated in both policy and academic circles. …Read More

The Renewal of Europe’s Center?

 James, Harold, (2017), “The Renewal of Europe’s Center?”, Project Syndicate, 5 June British Prime Minister Theresa May, French President Emmanuel Macron, and German Chancellor Angela Merkel are different in many ways. May unexpectedly assumed her position last year after the Brexit vote, when her predecessor, David Cameron, resigned. Macron has even less experience: the presidency, which he just took over last month, is his first-ever elected position. Meanwhile, Merkel has served …Read More

Europe’s Tax Competition Is Unfair and Inefficient

Bershidsky, Leonid, (2017), “Europe’s Tax Competition Is Unfair and Inefficient”, Bloomberg, 31 May Juncker’s “see no evil, hear no evil” testimony was an extension of the LuxLeaks scandal that first broke in 2014. It transpired that more than 300 global companies, including Pepsi, McDonalds, Deutsche Bank and Amazon, had secured individual, secret tax rulings in the Grand Duchy. The scandal was huge, but its consequences haven’t lived up to the hype. Luxembourg codified its tax-ruling …Read More

Europe as an optimal political area: New findings

Alesina, Alberto, Tabellini, Guido, Trebbi, Francesco, (2017), “Europe as an optimal political area: New findings”, Vox Eu, 2 June In the economic analysis of secession and integration, the answer to this question reflects a trade-off between the benefits of economies of scale and scope in the provision of global public goods on the one side, and the cost due to heterogeneity of preferences on the other (Alesina and Spolaore 1997). The …Read More

Vive l’Euro?

Reichlin, Lucrezia, (2017), “Vive l’Euro?”, Project Syndicate, 1 June Emmanuel Macron’s victory in the French presidential election on May 7 triggered a surge of optimism about the future of the European Union, and the eurozone in particular. This is partly because Macron ran an unambiguously pro-EU campaign, and was rewarded for it. But it is also because the threat of a populist government in one of the EU’s founding states is, …Read More