Europe's nations and regions

Biagio Bossone, Marco Cattaneo, 26 May 2015

Introducing a currency in parallel to the euro could help Greece repay its external debt and resume economic activity. This second column in a two-part series evaluates the different options and their effects on aggregate demand and fiscal sustainability. The authors propose a tax credit certificates programme, which they argue could generate new spending capacity and avoid the adoption of new austerity measures.

Biagio Bossone, Marco Cattaneo, 25 May 2015

To prevent it from defaulting on its debt, the Greek government might need to introduce a new domestic currency, in parallel to the euro. This column, the first in a two-part series, compares the current proposals for a parallel currency and discusses how such a policy instrument could promote economic recovery.

Harald Benink, Harry Huizinga, 16 May 2015

QE in the Eurozone is unusual in that the risks of sovereign debt defaults are shared between the ECB and the national central banks. This column argues that if such risk sharing were applied to the Outright Monetary Transactions programme, it could potentially create insolvency problems for countries with large public debts, especially in a low-growth scenario.

Jan Hanousek, Anna Kochanova, 04 May 2015

The evidence about the effect of bribery on economic growth is mixed. Some find it harmful while others believe it helps via a ‘grease the wheels’ effect. This column argues that the ambiguity can be explained by divergent effects of the mean and dispersion of corruption. A high bribery-mean retards productivity growth of firms, but a high bribery-dispersion facilitates performance of weak firms.

Marco Buti, Alessandro Turrini, 17 April 2015

An oft expressed view is that the Eurozone is a straitjacket on periphery members and income convergence has slowed, halted or reversed.  This column argues that EZ convergence never stopped. What changed was the type of convergence. Today’s convergence is neither nominal nor real, it is structural.  Structural convergence presents a basis for renewed real convergence. However, for this to happen, the right institutions and policies need to be in place at both European and national levels.

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