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Public debt in low-income countries: Risks and opportunities

Pienkowski, Alex ,  Saito, Joyce Miharu,Tambunlertchai, Suchanan, (2016), “Public debt in low-income countries: Risks and opportunities”, Voxeu, 28 March Initiatives to reduce public debt in low-income countries have made substantial progress over the past decade, but challenges remain and continue to evolve. This column presents the findings from a new IMF-World Bank report on these developments. Low-income countries have benefited from debt relief and favourable economic conditions, resulting in generally lower debt …Read More

Completing Maastricht 2.0 to safeguard the future of the Eurozone

Feld, Lars, P., Schmidt, Christoph, M.,  Schnabel, Isabel, Wieland, Volker , (2016), “Completing Maastricht 2.0 to safeguard the future of the Eurozone”, Voxeu, 23 March Economists continue to debate how to safeguard the Eurozone, with some countries exiting the Crisis and some still reeling from it. This column, by members of the German Council of Economic Experts, concludes that reforms have mostly moved the Eurozone in the direction of ‘Maastricht …Read More

The ECB Goes Rogue

Eijffinger, Sylvester, (2016), “The ECB Goes Rogue”, Project Syndicate, 18 March The European Central Bank has done it again. At its recent meeting in Frankfurt, the ECB Governing Council decided to increase bond purchases further, from €60 billion ($67 billion) to €80 billion per month, with corporate bonds now also eligible for purchase. The deposit rate, too, was reduced once again, and now stands at -0.4%. This is far from a …Read More

Causes of the Eurozone Crisis: A nuanced view

Feld, Lars, P., Schmidt, Christoph, M., Schnabel, Isabel, Wieland, Volker, (2016), “Causes of the Eurozone Crisis: A nuanced view”, Voxeu, 22 March Hindsight is a wonderful thing. In the midst of a crisis, it is of course very hard to understand causality. This column uses the benefit of hindsight to present a nuanced view of the causes of the Eurozone Crisis as seen by members of the German Council of Economic Experts. To …Read More

Confronting the Fiscal Bogeyman

Eichengreen, Barry, (2016), “Confronting the Fiscal Bogeyman“, Project Syndicate , 11 March The world economy is visibly sinking, and the policymakers who are supposed to be its stewards are tying themselves in knots. Or so suggest the results of the G-20 summit held in Shanghai at the end of last month. The International Monetary Fund, having just downgraded its forecast for global growth, warned the assembled G-20 attendees that yet another downgrade was …Read More

The G20’s structural reform agenda should address income gap and financial system fragility

Wolff, Guntram, B., (2016), “The G20’s structural reform agenda should address income gap and financial system fragility”, Bruegel, 15 March Traditional macroeconomic policies have been important in stabilizing the global economy, but they are no longer enough to addressing the fragility and low growth of the current economic environment. In particular, they cannot sustainably address the persistent weakness of demand, let alone drive new productivity growth. Such policies have far more limited ammunition …Read More

Moral suasion and bond buying in the Eurozone Crisis

Ongena,Steven, Popov, Alexander, van Horen, Neeltje, (2016), “Moral suasion and bond buying in the Eurozone Crisis“, Voxeu, 17 March The European sovereign debt crisis has triggered speculation that part of the increase in banks’ holdings of domestic sovereign debt was driven by ‘moral suasion’ by governments. This column shows that domestic banks in fiscally stressed countries were considerably more likely than foreign banks to increase their holdings of sovereign bonds in those …Read More

Why Global Inequality Matters

Milanovic, Blanko, (2016),” Why Global Inequality Matters“, Social Europe, 18 March Let me start by enquiring about the importance assumed by inequality in the public debate during these last years. As we know, inequality has been marginalised both in academia and in politics – also and especially on the left, which should have been the most sensitive to social issues. Then, all at once, with the outbreak of the crisis, inequality has …Read More

The ‘Tax Shift’: A Surrealist Fantasy

Drahokoupil, Jan, (2016), “The ‘Tax Shift’: A Surrealist Fantasy“, Social Europe, 15 March Reducing taxes on labour – personal income taxes and employers’ and employees’ social security contributions – is often seen as key to increasing employment levels. The latest crop of country-specific recommendations issued by the European Commission is a case in point. Relevant Posts  OECD tax burdens on wages rising without tax rate increases, OECD Publications, April 2015. Holter, H., Krueger, D. & Stepanchuk, S. (2015) …Read More

ECB TLTRO 2.0 – Lending at negative rates

Merler, Silvia, (2016), “ECB TLTRO 2.0 – Lending at negative rates”, Bruegel Blog, 11 March The ECB first announced its targeted long-term refinancing operations (TLTRO)  in summer 2014, and operations started in September 2014. Under the first version of the programme, banks could borrow an initial allowance of 7% of their outstanding loans to the euro area non-financial private sector. They could then borrow additional funds in a second wave …Read More