De Grauwe, Paul, (2012),‘Mispricing of Sovereign Risk and Macroeconomic Stability in the Eurozone’, Journal of Common Market Studies, Vol. 50, Issue 6, p.p.866–880. The economic and financial crisis and its aftermath have put economic and monetary union (EMU) to the test and exposed gaps in its initial policy architecture. Collective rules of fiscal discipline have proven difficult fully to enforce and excessive public indebtedness has been confirmed as a potential …Read More

Buti, Marco, Carnot, Nicolas (2012), ‘The EMU Debt Crisis: Early Lessons and Reforms’, Journal of Common Market Studies, Vol. 50, Issue 6, p.p. 881-898. The economic and financial crisis and its aftermath have put economic and monetary union (EMU) to the test and exposed gaps in its initial policy architecture. Collective rules of fiscal discipline have proven difficult fully to enforce and excessive public indebtedness has been confirmed as a …Read More

Drudi, Francesco, Durre, Alain, Paolo Mongelli, Francesco, (2012),‘The Interplay of Economic Reforms and Monetary Policy: The Case of the Eurozone’, Journal of Common Market Studies, Vol. 50, Issue 6, p.p. 881–898. The world has been struck by a mutating systemic financial crisis that is unprecedented in terms of financial losses and fiscal costs, geographic reach, and speed and synchronization. The crisis from August 2007 to date can be divided into …Read More

IMF, (2012), ‘External Imbalances in the Euro Area’, European and Western Hemisphere Departments, IMF Working Papers, N. 12/36. The paper examines the extent to which current account imbalances of euro area countries are related to intra-euro area factors and to external trade shocks. We argue that the traditional explanations for the rising imbalances are correct, but are incomplete. We uncover a large impact of declines in export competitiveness and asymmetric …Read More

Favero, Carlo, Missale, Alessandro, (2012),‘Sovereign spreads in the eurozone: which prospects for a Eurobond?’, Economic Policy, Vol. 27, Issue 70, p.p. 231 – 273. In this paper, we provide new evidence on the determinants of sovereign yield spreads and ‘market sentiment’ effects in the eurozone in order to evaluate the rationale for a common Eurobond jointly guaranteed by eurozone Member States. We find that default risk is the main driver …Read More

Muscatelli, Vito & Piergiovanna, Natale, (2012), ‘A simple and flexible alternative to Stability and Growth Pact deficit ceilings. Is it at hand?’, European Journal of Political Economy,Volume 28, Issue 1, p.p. 14–26. We model a monetary union where fiscal discretion generates excessive debt accumulation in steady state and inefficiently delayed debt adjustment following shocks. By setting a debt target and raising the political cost of deviating from the optimal pace …Read More