Kahn, R. (2014) “Lowflation: Should We Fear Stable Prices?“, Global Economics Monthly: June 2014, Council on Foreign Relations, 10 June.   Overview: Bottom Line: Low inflation may be symptomatic of deeper problems, such as inadequate demand or central bank policy failures. The costs of low inflation could be high for European economies. There is a new Washington consensus, and it consists of a simple message: low inflation threatens the global …Read More

Murphy, D., Vasios, M. & Vause, N. (2014) “An investigation into the procyclicality of risk-based initial margin models“, VoxEU Organisation, 06 June.   Initial margin models are often procyclical, raising margin requirements at times of market stress, which can exacerbate that stress. This column proposes quantitative measures of procyclicality both over the cycle and over liquidity planning horizons. If market participants disclosed these procyclicality measures of their margin models, this …Read More

Sadeh, T. (2014) “The euro’s effect on trade“, European Union Politics, Vol. 15, No. 2, June.   This study argues that the euro area more than doubled trade among its members, but this process was delayed and fitful. The estimates in this article are close to those obtained by Rose and Frankel, despite the usage of methods developed by their critics. Furthermore, the euro area has increased the trade of …Read More

Gropas, R. & Triandafyllidou, Α. (2014) “’Voting With Their Feet’, Highly Skilled Emigrants From Southern Europe”, American Behavioral Science (ABS), June.   In this article, the authors present new empirical data on highly skilled emigrants from two southern European countries, Italy and Greece, which have been particularly hit by the global financial and Eurozone crisis. The data have been generated by an e-survey conducted in late spring and summer 2013. …Read More

Magud, N. & Vesperoni, R. E. (2014) Exchange-rate flexibility and credit during capital inflow deversals: Purgatory… not paradise, VoxEU Organisation, 30 May.   Expansionary monetary policy in advanced economies have created capital inflow booms in emerging markets. This column analyses the effect of exchange rate flexibility on credit markets during capital inflow booms. In economies with less flexible exchange rate regimes, credit grows faster and more towards foreign currency. These …Read More

Lof, Μ. & Malinen, Τ. (2014) “Determinants of the growth and sovereign debt correlation“, VoxEU Organisation, 25 May.   Public debt and economic growth are historically negatively correlated. This column discusses new evidence that rejects the debt-to-growth causality. After estimating the effects between debt and growth in both directions, there is no evidence that high indebtedness suppresses economic growth. The effect of growth on debt is the main driver of …Read More

De Grauwe, P. & Ji, Y. (2014) “Disappearing government bond spreads in the eurozone – Back to normal?“, Economic Policy, CEPS Working Documents, 14 May.   Since the announcement of the Outright Monetary Transactions (OMT) programme by Mario Draghi, President of the ECB, in 2012, the government bond spreads began a strong decline. This paper finds that most of this decline is due to the positive market sentiments that the …Read More

Onder, H. & Pestieau, P. (2014) “For economies, age is not just a number“, VoxEU Organisation, 20 May.   The world’s population is ageing, due to both increasing longevity and decreasing fertility. This column shows that the net effect of ageing on capital accumulation (and therefore growth) depends on which of these two factors dominates, and also on the structure of the pension system. Under a pension system with defined …Read More