Timotej Homar, Sweder van Wijnbergen, 13 February 2016

It has been claimed that recessions as a result of a financial crisis tend to last longer than normal recessions. This column asks whether early intervention to help distressed banks during financial crises is effective in mitigating the consequences of financial distress. The evidence suggests that decisive and early recapitalisation of banks can shorten recessions by several years and help speed up recovery. 

Richard Baldwin, Francesco Giavazzi, 12 February 2016

Important progress has been made in repairing the design faults that the EZ Crisis revealed. This column introduces a new VoxEU eBook which argues that fixing the Eurozone is a job half done. The eBook, which presents 18 chapters by leading economists that hail from a broad range of nations and schools of thought, is surely the most comprehensive collection of solutions that has ever been assembled.

Christian Krohn, 12 February 2016

The role of equities in Europe’s capital markets has diminished since the Global Crisis and is only slowly recovering to its prior level. This column argues that revitalising its equity markets has much to offer Europe in terms of funding business growth, creating jobs, and delivering long-term pension returns for the ageing population. The root causes of Europe’s underutilised equity markets are both cultural and regulatory. Understanding and addressing these barriers are the next necessary steps towards the full utilisation of equities.

Kristin Forbes, Ida Hjortsoe, Tsvetelina Nenova, 12 February 2016

A major challenge for monetary policy is predicting how exchange rate movements will impact inflation. This column explains why rules of thumb could be misleading and proposes a new approach that incorporates the source of exchange rate movements when evaluating how they pass through to import prices and inflation.

Lars Ivar Oppedal Berge, Kjetil Bjorvatn, Simon Galle, Edward Miguel, Daniel Posner, Bertil Tungodden, Kelly Zhang, 11 February 2016

Ethnic divisions have been shown to adversely affect economic performance and political stability, particularly in Africa. However, the underlying mechanisms remain poorly understood. Using experimental data from Kenya, this column studies whether one potential mechanism – co-ethnic bias – affects altruism. Strikingly, most tests yield no evidence of co-ethnic bias, suggesting that other mechanisms must be driving the negative association between ethnic diversity and economic and political outcomes in Africa.

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