Macroeconomic policy

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.

Thorvaldur Gylfason, 16 April 2015

Whereas some argue there is no need to revise the US constitution, others believe that its inherent flaws are in the core of the US’ decreasing power. This column reviews four alleged flaws of the US constitution. There is a striking similarity in method and substance between current proposals for constitutional reform in the US and the post-crash constitutional reform process in Iceland presently held captive by parliament..

The Editors, 15 April 2015

The Eurozone’s problems of poor growth and the threat of financial instability are rooted in its very foundation. The authors of the inaugural Monitoring the Eurozone report, launched today, consider three means by which the Eurozone can protect itself from structural failure. Their recommendations, which do not require Treaty changes, are crucial in offsetting the major risks a repetition of the recent Crisis would present.

Ettore Dorrucci, Demosthenes Ioannou, Francesco Paolo Mongelli, Alessio Terzi, 15 April 2015

Despite a significant progress over the past decades, European integration still needs improvement in some areas. This column presents a long-term narrative of European integration by using a recently published European index of regional institutional integration. The index maps developments in European integration from 1958 to early 2015 on the basis of a new monthly dataset. The evidence shows that successful integration could be achieved with reforms that are inclusive, widely explained, understood, and accepted.

Juan Carluccio, Denis Fougère, Erwan Gautier, 14 April 2015

International trade has significant effects on domestic labour demand. It opens up new markets for export, but also creates opportunities for off-shoring. This column presents the results of a study on trade, wages and collective bargaining using data on French manufacturing firms. Both exporting and offshoring are found to have positive effects on wages, with collective bargaining agreements, particularly those at the firm-level, seeing greater wage gains for all types of worker.

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