Huttl, Pia, Goncalves Raposo, Ines, (2017), “An update: Sovereign bond holdings in the euro area – the impact of QE”, Bruegel, 9 March Since the ECB’s announcement of its QE programme in January 2015, national central banks have been buying government and national agency bonds. In this post we look at the effect of QE on sectoral holdings of government bonds, updating our calculations published in May and November 2016. …Read More
The ECB Faces a Balance Sheet Dilemma
DiMartino Booth, Danielle, (2017), “The ECB Faces a Balance Sheet Dilemma”, BloombergView, 9 March Nature versus nurture. That philosophical debate is more pertinent than ever when it comes to the interventionist efforts of central banks that seek to will their economies back onto a sustainable growth path. But even the noblest of intentions can bump up against limitations when nature, in this case the free functioning of financial markets, is …Read More
Populism Versus Prosperity
Emmott, Bill, (2017), “Populism Versus Prosperity”, Project Syndicate, 9 March Marine Le Pen, the leader of France’s far-right National Front, claims that the twenty-first century’s defining battle will be between patriotism and globalism. US President Donald Trump appears to believe that it will be between “the very fake news media” and himself, backed by “the people” he claims to represent. They are both wrong. The battle that will actually define …Read More
The EU’s new white paper underlines why Europe needs to be more open to its citizens
Schmidt, Vivien, Wood, Matt, (2017), “The EU’s new white paper underlines why Europe needs to be more open to its citizens”, LSE EUROPP, 10 March At the start of March, the European Commission published a white paper ‘On the Future of Europe’. Vivien Schmidt and Matt Wood assess the Commission’s proposals, arguing that while the paper’s focus on differentiated integration is pragmatically useful under the current circumstances, this strategy could exacerbate …Read More
The Commission’s White Paper on the Future of Europe – a case of what might have been
Begg, Iain , (2017), “The Commission’s White Paper on the Future of Europe – a case of what might have been…”, EUROPP, 9 March Last week, the European Commission published its White Paper on the Future of Europe (WP), its attempt to set out the options for the development of the European Union. It explicitly rejects the narrow choice between more or less, offering instead a range of scenarios described as ‘neither mutually …Read More
How to re-employ the Spanish long-term unemployed
Bentolila, Samuel, Pérez, Jose Ignacio García , Jansen, Marcel , (2017), “How to re-employ the Spanish long-term unemployed”, Vox Eu, 9 March One of the most tangible legacies of the Great Recession is a surge in the incidence of long-term unemployment, especially in Spain. This is not a new problem – as the title of the 1995 CEPR report, Spanish Unemployment: Is There a Solution?, attests (Andres et al. 1995) – …Read More
The ECB’s ‘High-Class Problem’
Emons, Ben, (2017), “The ECB’s ‘High-Class Problem’”, BloombergView, 7 March The European Central Bank has been in a difficult position when it comes to addressing inflation with conventional policy. The main reason is that, during the debt crisis, the bank faced a trade-off between stabilizing European sovereign bonds, consumer inflation and lending. Financial stress from sovereign bonds spilled over into the real economy and left the ECB with residual deflation, high …Read More
Europe’s Populists Aren’t the Threat You Think
Bershidsky, Leonid, (2017), “Europe’s Populists Aren’t the Threat You Think”, BloombergView, 7 March For more than a year, the big scare out of Europe has been that populist movements, often far-right and euroskeptic, would win elections across the continent. But electoral landscapes are shifting fast, and it’s time to consider a different scenario — in which the populists lose everywhere. Relevant Posts Gros, Daniel, (2017), “Can the EU survive in an …Read More
Germany’s Misunderstood Trade Surplus
Fratzscher, Marcel, (2017), “Germany’s Misunderstood Trade Surplus”, Project Syndicate, 7 March Now that Germany’s current-account surplus has reached a record €270 billion ($285 billion), or close to 8.7% of GDP, the ongoing debate about its economic model has intensified. Eurozone politicians and Donald Trump’s administration in the United States are each blaming the other for the economic imbalance; and all are blaming the euro. Relevant Posts Merler, Sylvia, (2017), “Is Germany …Read More
How the Euro Could Break Up—or Be Saved
Wishart, Ian, Rojanasakul, Mira, Fraher, John, (2017), “How the Euro Could Break Up—or Be Saved”, Bloomberg Politics, 7 March Talk about the breakup of the euro is fashionable again. With populists such as Marine Le Pen trying to storm the establishment and the popularity of the single currency in decline, executives and investors, including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, say nothing can be ruled out. At the …Read More