Bofinger, Peter,Scheuermeyer, Philipp, (2016), “Income distribution and aggregate saving: New evidence”, VoxEu, 20 October The effect of income distribution on aggregate saving has important implications for aggregate demand and global current account imbalances.  Drawing on evidence from a panel of high-income OECD countries, this column documents a hump-shaped relationship between inequality and aggregate saving rates. It also shows that the relationship between inequality and saving depends on financial market conditions. …Read More

Campos, Nauro, Macchiarelli, Corrado, (2016), “A new measure of economic asymmetries in the Eurozone”, VoxEu, 19 October Explanations for the Eurozone Crisis rely on the notion of cross-country asymmetries. The core-periphery pattern to the EU was first established by Bayoumi and Eichengreen in 1993, prior to the Eurozone. This column replicates their approach to explore whether the euro has strengthened or weakened this pattern. A new ‘coreness index’ indicates that …Read More

Demertzis, Maria, (2016), “A framework for thinking about bad loans”, Bruegel, 18 October An important guiding principle in resolving non-performing loans (NPLs) should be to ensure that viable debt remains serviced, while non-viable debt gets resolved. We present here a framework to approach the issue. Relevant Posts Panagiotarea, Eleni, (2016), “The Political Economy of NPLs resolution: Ownership and conditionality”, Hellenic Observatory LSE, 13 October Minenna, Marcello, (2016), “The Italian Non-Performing Loans …Read More

A. El-Erian, Mohamed, (2016), “Toxic Politics Versus Better Economics”, Project Syndicate, 15 October The relationship between politics and economics is changing. Advanced-country politicians are locked in bizarre, often toxic, conflicts, instead of acting on a growing economic consensus about how to escape a protracted period of low and unequal growth. This trend must be reversed, before it structurally cripples the advanced world and sweeps up the emerging economies, too. Relevant Posts …Read More

Reichlin, Lucrezia, Vallée, Shahin, (2016), “Resolving Europe’s Banking Crisis in Italy”, Project Syndicate, 14 October The European banking sector is crippled and highly fragmented. Though its problems are more acute for some countries and financial institutions, the sector runs on a level of profitability that is, on average, lower than its cost of equity and maintains a stock of non-performing loans and hard-to-value assets large enough to undermine its capitalization for years …Read More