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Twenty years on: Is there still a case for Bank of England independence?

Balls, Ed, Stansbury, Anna, (2017), “Twenty years on: Is there still a case for Bank of England independence?”, Vox Eu, 1 May Twenty years ago on 6 May 1997, the Bank of England was made independent by the new Labour government. Alongside the world’s other major central banks, this independence was until recently unchallenged (and unchallengeable): a central pillar of the global consensus on macroeconomic stabilisation. But since the financial …Read More

Reprieve or Reform in Europe?

 Spence, Michael, (2017), “Reprieve or Reform in Europe?”, Project Syndicate, 29 April With the pro-EU Macron seemingly headed toward the Élysée Palace – the establishment candidates on the right and the left who lost in the first round have already endorsed him – the immediate threat to the EU and the eurozone seems to have subsided. But this is no time for complacency. Unless Europe addresses flaws in growth patterns …Read More

Draghi’s Right to Keep His Foot on the Gas

Giugliano, Ferdinando, (2017), “Draghi’s Right to Keep His Foot on the Gas”, Bloomberg View, 28 April 2017 Since becoming president of the European Central Bank, Mario Draghi has rarely looked as relaxed as he did in Thursday’s press conference. It’s not hard to see why: The euro-zone economy is gathering speed, confidence is soaring, and unemployment is tumbling. The recovery is also spreading across the region, reducing the risk that …Read More

For A Treaty Democratizing Euro Area Governance

Hennette, Stéphanie, Sacriste, Thomas Piketty Guillaume, Vauchez, Antoine, (2017), “For A Treaty Democratizing Euro Area Governance”, Social Europe, 27 April Over the last ten years of economic and financial crisis, a new centre of European power has taken shape: the ‘government’ of the Euro Area. The expression may seem badly chosen as it remains hard to identify the democratically accountable ‘institution’ which today implements European economic policies. We are indeed aiming …Read More

Why Europe Still Needs Cash

Mersch, Yves, (2017), “Why Europe Still Needs Cash”, Project Syndicate, 26 April Non-cash payment options have been proliferating in recent years. Credit cards, online transfers, and direct-debit payments are already well established. Now, smartphone-enabled digital-payment solutions and mobile wallets are also gaining ground. The emergence of potentially disruptive innovations like distributed ledger technologies indicate that further and possibly fundamental change may be on the horizon. Independent of these new and incipient …Read More

The global decline in the labour income share: is capital the answer to Germany’s current account surplus?

Berger, Ennet, Wolff, Guntram B., (2017), “The global decline in the labour income share: is capital the answer to Germany’s current account surplus?”, Bruegel, 26 April There are two broad views of adjustment in Europe’s economic and monetary union. The first is that the divergence of competitiveness in the euro area is the fault of the peripheral countries, which were guilty of “losing their competitiveness simply by becoming too expensive” prior …Read More

Exchange rate prediction redux

Cheung, Yin-Wong, Chinn, Menzie , Pascual, Antonio Garcia, Zhang, Yi, (2017), “Exchange rate prediction redux”, Vox Eu, 27 April Over the past decade, advanced economy exchange rates have exhibited substantial variability, even as conventional empirical determinants – such as interest rates and inflation – have remained fairly stable. At the same, the Global Crisis was associated with unprecedented levels of risk and illiquidity, with obvious effects on financial markets. These developments …Read More

ECB Meeting Comes at a Precarious Time for Markets

Emons, Ben, (2017), “ECB Meeting Comes at a Precarious Time for Markets”, Bloomberg View, 25 April The recent economic data out of the euro zone is encouraging. Production, manufacturing and confidence are robust, and inflation has stabilized. That’s not to say that there aren’t risks to the downside, such as growing populism, global geopolitical tensions, and uncertainty about sustainability of the economic recovery. To insure against these risks, the European …Read More

Draghi’s Stimulus Could Blunt Populism as Unemployment Falls

Speciale, Alessandro, (2017), “Draghi’s Stimulus Could Blunt Populism as Unemployment Falls”, Bloomberg Markets, 25 April Mario Draghi’s stimulus didn’t prevent the rise of populists who want to reject the euro, but it might be taking the edge off the economic pain that fueled their support. The European Central Bank president has pushed through measures that have led the currency bloc out of a double-dip recession and cut unemployment, a key source of …Read More

The ECB’s Monetary Dialogue with the European Parliament: Efficiency and Accountability during the Euro Crisis?

Collignon, Stefan, Diessner, Sebastian, (2017), “The ECB’s Monetary Dialogue with the European Parliament: Efficiency and Accountability during the Euro Crisis?”, Journal of Common Market Studies, July The monetary dialogue between the European Parliament and the European Central Bank (ECB) is a key component for the democratic accountability of the independent central bank. We provide new evidence for the efficiency of the dialogue and present the results of a survey conducted amongst the …Read More