Cristina Arellano, Andy Atkeson, Mark Wright, 10 January 2016

In the recent crisis in Southern Europe both sovereign governments and private citizens faced increased borrowing costs on their external debt. By contrast, no spillover to private borrowers occurred from the recent US state government debt crisis. This column argues that this different experience stems from much weaker European protections from government interference – the risk that governments will encumber private debt contracts by redenominating the currency of the contract, imposing capital controls, or passing debtor relief legislation. 

Sumit Agarwal, Souphala Chomsisengphet, Neale Mahoney, Johannes Stroebel, 09 January 2016

During the Great Recession, governments famously (and in some cases, infamously) provided banks with lower-cost capital and liquidity so that they would lend, expanding economic activity. This column assesses the efficacy of these policies, estimating marginal propensities to consume and borrow between 2008-2012.

Neil Kay, Gavin Murphy, Conor O'Toole, Iulia Siedschlag, Brian O'Connell, 29 June 2014

Small and medium-size enterprises (SMEs) often report difficulties in obtaining external finance. Based on new research, this column argues that these difficulties are not due to greater financial risks associated with SMEs. Instead, they are the result of imperfections in the market for external finance that negatively affect smaller and younger enterprises. The same research has shown that these types of firms are also the most reliant on external finance to support their investment and growth.

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