Speciale, Alessandro, (2017), “ECB Worried About the Euro? Economists Say ‘Not So Much’”, Bloomberg Markets, 5 September European Central Bank Governing Council member Ewald Nowotny said last week that the euro’s recent rise shouldn’t be “over-dramatized,” a notion that economists seem to agree with. The euro has surged more than 13 percent against the dollar this year. In terms of the real exchange rate against the euro area’s major trading partners (a …Read More
Draghi Seen Acknowledging Euro Gains at September Decision
Speciale, Alessandro, Skolimowski, Piotr, Tartar, Andre, (2017), “Draghi Seen Acknowledging Euro Gains at September Decision”, Bloomberg Markets, 3 September Mario Draghi won’t miss the opportunity to mention the euro’s recent appreciation as he prepares to reconfigure the euro area’s stimulus settings, economists say. The European Central Bank president will express concern about the currency’s strength, a Bloomberg survey shows. While he declined to address the exchange rate last month at his appearance in …Read More
How to Renew the European Project
Schmidt, Christoph M., (2017), “How to Renew the European Project”, Project Syndicate, 1 September The French presidential and legislative elections earlier this year have instilled new hope in the European integration project, by raising the prospect of deeper Franco-German cooperation. And yet some forms of cooperation, not least shared-liability schemes, would be a mistake. As long as member states have sovereignty over fiscal and economic policymaking, France and Germany should …Read More
The cycle of wage inequality in Spain: The impact of the boom and bust in the housing market
Bonhomme, Stéphane , Hospido, Laura, (2017), “The cycle of wage inequality in Spain: The impact of the boom and bust in the housing market”, VoxEU, 4 September The link between the rise in unemployment and the housing market in the US during the Great Recession is well documented. This column shows that in the case of Spain, the rise and fall in demand for construction workers following developments within the …Read More
More Action Needed on European Bank Profitability
Caparusso, John, Goel, Rohit, Kerry, Will, (2017), “More Action Needed on European Bank Profitability”, IMF Blog, 30 August European banking has made considerable progress in the past few years: Banks have built up capital, regulation is stronger and supervision has been enhanced. But profitability remains weak, posing risks for financial stability. In a sample of more than 170 large European lenders with combined assets of $35 trillion, roughly half generated …Read More
Euro area unemployment at 9. 1 %
Eurostat/Euro area unemployment at 9.1%/31 August 2017 Τhe euro area (EA19) seasonally-adjusted unemployment rate was 9.1% in July 2017, stable compared to June 2017 and down from 10.0% in July 2016. This is the lowest rate recorded in the euro area since February 2009. The EU28 unemployment rate was 7.7% in July 2017, stable compared to June 2017 and down from 8.5% in July 2016. This remains the lowest rate …Read More
August 2017: Economic Sentiment continues to rise in the euro area, broadly stable in the EU
European Commission/August 2017: Economic Sentiment continues to rise in the euro area, broadly stable in the EU/30 August 2017 The Economic Sentiment Indicator (ESI) for the euro area rose again in August, increasing slightly by 0.6 points to 111.9, its highest level in more than 10 years. The indicator for the EU remained broadly stable (-0.3 points to 111.9), just below its 10-year high of July. Relevant Posts European Commission, (2016), …Read More
Getting Serious About Europe’s Fiscal Future
Bloomberg View, (2017), “Getting Serious About Europe’s Fiscal Future”, 31 August In her re-election campaign, which seems to be going well, German Chancellor Angela Merkel has so far succeeded in avoiding controversy over a potentially divisive issue: the European Union’s fiscal prospects. After the election, this question will refuse to be ignored. Relevant Posts Rogoff, Kenneth, (2017), «How Long Can the Eurozone Survive Without Greater Integration?», Project Syndicate, 14 June Enderlein, …Read More
Euro area annual inflation up to 1.5%
Eurostat/Euro area annual inflation up to 1.5% /31 August 2017 Euro area annual inflation is expected to be 1.5% in August 2017, up from 1.3% in July 2017, according to a flash estimate from Eurostat, the statistical office of the European Union. Relevant Posts Eurostat/Annual inflation stable at 1.3% in the euro area/17 August 2017 Eurostat/Annual inflation down to 1.3% in the euro area/17 July 2017
Correlation networks to measure the systemic implications of bank resolution
Paolo, Guidici, Parisi, Laura, (2017), “Correlation networks to measure the systemic implications of bank resolution”, VoxEU, 28 August In the European single resolution framework, there are three potential paths for failing banks: bail-in, private intervention, or liquidation. This column proposes combining a new market-based early warning measure of credit risk based on CDS spreads to investigate potential losses and systemic contagion for each path. Applying this to Italy’s banking system …Read More