Bibow, J. (2014) “On The Alleged Pains of the Strong Euro“, Social Europe Journal, 03 April.   Since its most recent low of $1.20, reached in the heat of the summer of 2012, the euro has appreciated by 15 percent against the US dollar and by more than 10 percent in inflation-adjusted terms against a broad basket of currencies representative of the euro area’s main trading partners. Amounting to a …Read More

Vihriälä, V. & Weder di Mauro, B. (2014) “Orderly debt reduction rather than permanent mutualisation is the way to go“, VoxEU Organisation, 02 April.   The EZ debt overhang needs to be fixed. This column argues that making market discipline credible requires an orderly debt restructuring mechanism combined with a strictly regulated temporary mutualisation scheme or a well-designed debt conversion scheme. This combination could reduce the current debt overhang in …Read More

Smith, Y. (2014) “Understanding the Confidence Fairy“, MacroBusiness, 1 April.   One strange claim in the economic debate that followed the financial crisis was the impact of uncertainty on the path of investment and subsequently the recovery in economic activity. Taking just one example, it was claimed here that “fiscal policy uncertainty has directly harmed the American economy by increasing the unemployment rate by 0.6%, or the equivalent of 900,000 …Read More

Piketty, T. (2014) “Kapital for the Twenty-First Century?“, Belknap Press, 2014, 671 pp.   What is “capital”? To Karl Marx, it was a social, political, and legal category—the means of control of the means of production by the dominant class. Capital could be money, it could be machines; it could be fixed and it could be variable. But the essence of capital was neither physical nor financial. It was the …Read More

Bordo, M. (2014) “TARGET Balances, Bretton Woods, and the Great Depression“, VoxEU Organisation, 21 March.   Since 2007, there has been a buildup of TARGET imbalances within the Eurosystem – growing liabilities of national central banks in the periphery matched by growing claims of central banks in the core. This column argues that, rather than signalling the collapse of the monetary system – as was the case for Bretton Woods …Read More

Frankel, J. (2014) “The ECB Should Do QE, Mario? Buy US Bonds, Not Eurobonds“, Opinion Article, VoxEU Organisation, 24 March. The Eurozone needs to further ease monetary policy because under the current low inflation and high unemployment periphery countries need to suffer painful deflation. However, the ECB faces challenges other central banks do not face. This column proposes a way to overcome some of these hurdles. It argues that the …Read More

Huertas, T. & Nieto, J. M. (2014) “How Much is Enough? The Case of the Resolution Fund in Europe“, Vox: Research-Based Policy Analysis & Commentary from Leading Economists, 18 March.   The European Resolution Fund is intended to reach €55 billion – much less than the amount of public assistance required by individual institutions during the recent financial crisis. This column argues that the Resolution Fund can nevertheless be large …Read More