Wieland, Elisabeth, Kavonius, Ilja Kristian, (2016), “Estimating gross value added volumes and prices by institutional sector”, European Central Bank, Statistic Paper Series 14, July This paper reviews different estimation techniques to derive sectoral volumes and prices of GVA for the euro area by linking QSA to QNA data. First, we apply a nonparametric approach, which relies on existing information on the distribution of institutional sectors across economic activities. For this purpose, we use …Read More
Designing effective automatic stabilisers of the business cycle
McKay, Alisdair, Reis, Ricardo, (2016), “Designing effective automatic stabilisers of the business cycle”, Voxeu, 14 July Brexit has raised the possibility of a recession on both sides of the Atlantic. Unable to use traditional remedies like monetary or fiscal policy stimulus, policymakers may consider automatic fiscal stabilisers. This column examines the impact of automatic stabilisers through social insurance on the business cycle, and how its impact can be used to mitigate recession. Unemployment …Read More
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Harmonising insolvency laws in the Euro Area: rationale, stock-taking and challenges. What role for the Eurogroup?
Valiante, Diego, (2016), “Harmonising insolvency laws in the Euro Area: rationale, stock-taking and challenges. What role for the Eurogroup?”, European Parliament, July There are four distinct areas where harmonising national insolvency frameworks can improve the functioning of the single market and the stability of the Euro area. Early restructuring of businesses, bank resolution, cross-border insolvency and NPL management rely on common features of local insolvency frameworks, which can affect their …Read More
Euro Area At The Crossroads No Time For Complacency
IMF, (2016), “Euro Area At The Crossroads No Time For Complacency”, 8 July Recovery in the euro area has strengthened, but the medium-term outlook remains weak and is endangered by a lack of collective action to address common challenges. Members must rebuild faith in the monetary union, says the IMF in its latest review of the currency union. “The euro area is at a critical juncture. The progress made during the …Read More
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The invisible hand of the government: “Moral suasion” during the European sovereign debt crisis
Ongena, Steven, Popov, Alexander, Van Horen, Neeltje, (2016), “The invisible hand of the government: “Moral suasion” during the European sovereign debt crisis”, European Central Bank, Working papers 1937, July Banks’ rapidly increasing balance sheet exposures to domestic sovereign debt during the euro area sovereign debt crisis led both academics and policy makers to speculate that this development was at least partly the result of domestic sovereigns putting pressure on some banks to extend material support …Read More
Who’s Coming to the Rescue? Revenue-Sharing Slumps and Implicit Bailouts During the Great Recession
Foremny, Dirk, Solé-Ollé, Albert, (2016), “Who’s Coming to the Rescue? Revenue-Sharing Slumps and Implicit Bailouts During the Great Recession”, ZEW, Discussion Paper No. 16-049, May Local governments across the globe experienced high levels of fiscal stress during the last recession (Ter-Minassian and Fedelino, 2010). The causes of these fiscal imbalances were twofold. First, many local governments had to deal with a reduction in their own-source revenues, based as they were on taxes (most notably, …Read More
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Fiscal Implications of Central Bank Balance Sheet Policies
Orphanides, Athanasios, (2016), “Fiscal Implications of Central Bank Balance Sheet Policies”, Centre for Economic Policy Research, July Under ordinary circumstances, the fiscal implications of central bank policies tend to be seen as relatively minor and escape close scrutiny. The global financial crisis of 2008, however, demanded an extraordinary response by central banks which brought to light the immense power of central bank balance sheet policies as well as their major …Read More
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News and noise in the housing market
Gazzani, Andrea, (2016), “News and noise in the housing market”, European Central Bank, Working Papers 1933/ July During the last decades, the housing market has been recognized as a powerful source of instability for many economies around the world. The most striking examples are the US, Spain and Ireland. By taking a pure accounting view on US data, housing contributes to GDP in two basic ways: through private residential investment, …Read More
The politics of external approval: Explaining the IMF’s evaluation of austerity programmes
Hinterleitner, Markus, Sager, Fritz, Thomann, Eva, (2016), “The politics of external approval: Explaining the IMF’s evaluation of austerity programmes”, Wiley Online Library, 21 March During the European debt crisis, numerous states launched austerity programmes. The International Monetary Fund (IMF) evaluates and forecasts the likelihood of member states’ success in implementing these programmes. Although IMF evaluations influence country risk perceptions on capital markets, little is known about their reasoning. This article …Read More
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The reluctant defaulter: A tale of high government debt
Collard, Fabrice, Habib, Michel, Rochet, Jean-Charles, (2016), “The reluctant defaulter: A tale of high government debt”, Voxeu, 13 July Since the Global Crisis, sovereign debt levels have exploded in many OECD countries. This column presents a new measure of government debt – maximum sustainable debt. This measure takes account of the fact that a shortfall in growth naturally increases the probability of default, while allowing for the possibility of rollover. Applications to recent data suggest …Read More
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