European Commission, (2016), “Vade Mecum on the Stability and Growth Pact”, Institutional Paper 021, March Enhancing clarity of the strengthened fiscal (and economic) governance toolbox is among the actions set out in the 21 October 2015 Communication by the Commission On steps towards Completing Economic and Monetary Union.( 1 ) This document is the second issue of the Vade mecum, published for the first time in May 2013 with the …Read More
The US is beginning to dominate global investment banking: Implications for Europe
Goodhart, Charles A.E., Schoenmaker, Dirk, (2016), “The US is beginning to dominate global investment banking: Implications for Europe”, Voxeu, 28 March The European banking system is downsizing. As a consequence, the big US investment banks are on the rise in Europe. This column argues that US investment banks are about to surpass their European counterparts in the European investment banking market. The authors also discuss why leaving global investment banking to …Read More
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Europe’s Emerging Bubbles
Sinn, Hans-Werner, (2016), “Europe’s Emerging Bubbles”, Project Syndicate, 28 March The European Central Bank’s latest policy moves have shocked many observers. While the goal – to prevent deflation and spur growth – is clear, the policies themselves are setting the stage for severe instability. Relevant Posts Eijffinger, Sylvester, (2016), “The ECB Goes Rogue”, Project Syndicate, 18 March Merler, Silvia, (2016), “ECB TLTRO 2.0 – Lending at negative rates”, Bruegel Blog, 11 …Read More
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Good booms, bad booms: Why only some credit booms end in a crisis
Gorton, Gary B., Ordoñez, Guillermo L, (2016), “Good booms, bad booms: Why only some credit booms end in a crisis”, Voxeu, 27 March Credit booms are not rare and usually precede financial crises. However, some end in a crisis while others do not. This column argues that credit booms start with an increase in productivity, which subsequently falls much faster during ‘bad booms’. When this decline is severe enough, it changes the …Read More
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Economic surveillance and coordination mechanisms won’t work without proper scrutiny by national parliaments
Kreilinger, Valentin, (2016),” National Parliaments, Surveillance mechanisms and ownership in the Euro Area“, Jacques Delors Institut , March European coordination mechanisms play an increasingly important role in EU Economic Governance. However, there is still too little acceptance of the common rules and too little compliance in member states. This study asks to what extent the role of national parliaments and national political ownership can help to explain the lack of compliance and how recent …Read More
Public debt in low-income countries: Risks and opportunities
Pienkowski, Alex , Saito, Joyce Miharu,Tambunlertchai, Suchanan, (2016), “Public debt in low-income countries: Risks and opportunities”, Voxeu, 28 March Initiatives to reduce public debt in low-income countries have made substantial progress over the past decade, but challenges remain and continue to evolve. This column presents the findings from a new IMF-World Bank report on these developments. Low-income countries have benefited from debt relief and favourable economic conditions, resulting in generally lower debt …Read More
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Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions
Schneider, Friedrich, Buehn, Andreas, (2016), “Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions”, IZA DP No. 9820, March This paper presents various methods for estimating the size of the shadow economy and analyzes their strengths and weaknesses. The purpose of the paper is twofold. Firstly, it demonstrates that no ideal method exists to estimate the size and development of the shadow economy. Because of its flexibility, the MIMIC …Read More
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All’s Well that Ends Well? Resolving Iceland’s Failed Banks
Baldursson, Fridrik, Mar, Portes, Richard, Thorlaksson, Eirikur, Elis, (2016), “All’s Well that Ends Well? Resolving Iceland’s Failed Banks”, Centre for Economic Policy Research, March Iceland’s capital controls were imposed in October 2008 in order to prevent massive capital flight and a complete collapse of the exchange rate. The controls have not been lifted yet; until recently this was primarily because of the risk of large outflows of domestic holdings of …Read More
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Union Debt Management
Equiza-Goni, Juan, Faraglia, Elisa, Oikonomou, Rigas, (2016), “Union Debt Management”, Centre for Economic Policy Research, March We study the role of government debt maturity in a monetary union in the absence of fiscal transfers across countries. Our key finding is that fi scal hedging is only possible when spending represents an aggregate shock in the union. In the case of idiosyncratic disturbances in spending it is not possible to target a …Read More
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Completing Maastricht 2.0 to safeguard the future of the Eurozone
Feld, Lars, P., Schmidt, Christoph, M., Schnabel, Isabel, Wieland, Volker , (2016), “Completing Maastricht 2.0 to safeguard the future of the Eurozone”, Voxeu, 23 March Economists continue to debate how to safeguard the Eurozone, with some countries exiting the Crisis and some still reeling from it. This column, by members of the German Council of Economic Experts, concludes that reforms have mostly moved the Eurozone in the direction of ‘Maastricht …Read More
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