Gaspar, Vitor, Escolano, Julio, (2016), “An Argument for Paying Down Public Debt”, iMFdirect, 26 Αugust What should governments do about high public debt-to-GDP ratios?  This question is getting much-deserved attention. Let’s abstract from macroeconomic (business cycle) considerations and look at the issue purely from an optimal tax smoothing perspective—that is, weighing the cost and benefits of raising taxes to pay down debt. By doing so we decidedly do not engage in …Read More

Andor, László, (2016), “Transition To Transfers: Options For EMU Level Unemployment Insurance”, Social Europe, 29 Αugust In his new book on the euro, Joseph Stiglitz mentions unemployment insurance as part of a reform program that could make monetary union sustainable and palatable in Europe. The idea is not entirely new, and recent years have seen a good deal of studies and conferences exploring its costs and benefits. In documents like the …Read More

Turner, Adair, (2016), “Demystifying Monetary Finance”, Social Europe, 23 Αugust Eight years after the 2008 crisis governments and central banks – despite a plethora of policies and approaches – have failed to stimulate enough demand to produce sustained and strong growth. In Japan, so-called Abenomics promised 2% inflation by 2015; instead, the Bank of Japan (BOJ) expects it to be close to zero in 2016, with GDP growth below 1%. Eurozone …Read More

Buti, Marco, Leandro, José, Nikolov, Plamen, (2016), “Smoothing economic shocks in the Eurozone: The untapped potential of the financial union”, Voxeu, 25 Αugust The fragmentation of financial systems along national borders was one of the main handicaps of the Eurozone both prior to and in the initial phase of the crisis, hindering the shock absorption capacity of individual member states. The EU has taken important steps towards the deeper integration of …Read More

Bouton, Laurent, Lizzeri, Alessandro, Persico, Nicola, (2016), “The Political Economy of Debt and Entitlements”, CEPR, Αugust This paper presents a dynamic political-economic model of total government obligations. Its focus is on the interplay between debt and entitlements. In our model, both are tools by which temporarily powerful groups can extract resources from groups that will be powerful in the future: debt transfers resources across periods; entitlements directly target the future allocation …Read More