In many advanced countries, in the wake of the 2008 global financial crisis, deficits skyrocketed and public debt ballooned (see Figure 1). In fact, fiscal stimulus accounted for only a small fraction of the increase in debt, whereas collapsing revenues and higher unemployment and social benefits contributed the largest share (IMF 2011).
Self-defeating austerity shocks
Reda Cherif, Fuad Hasanov, 3 May 2013
Political Credit Cycles: The Case of the Euro Zone
Jesús Fernández-Villaverde, Luis Garicano, Tano Santos, 24 March 2013
Vox readers can download CEPR Discussion Paper 9404 for free here.
Should the role of preparing budgetary projections be delegated to an independent agency?
Rossana Merola, Javier J. Pérez, 1 May 2013
The debate about fiscal forecasts has recently been growing more intense in Europe. At its root, there is the evidence of planned government deficits significantly exceeding recurrent budgetary plans in recent years. This comes at a time of high public deficit and debt levels for EU member states.
Current-account surpluses in the Eurozone: Should they be reduced?
Alexandr Hobza, Stefan Zeugner, 26 April 2013
Current-account deficits are widely acknowledged to have posed significant policy problems in several Eurozone countries.1 Since the onset of the crisis, their adjustment has been associated with sharp contractions in consumption and investment, entailing high economic and social costs. But a deficit in any country requires a surplus in another to finance it.
Job placement and displacement: Evidence from a randomised experiment
Bruno Crépon, Esther Duflo, Marc Gurgand, Roland Rathelot, Philippe Zamora, 24 April 2013
Youth unemployment is a growing concern in many countries, including France where more than a quarter of recent graduates cannot find stable work. Some of these young graduates do not benefit from resources like unemployment benefits because they lack a sufficient employment history.
Fighting financial protectionism
Dirk Schoenmaker, 18 April 2013
International cooperation between national supervisors broke down during the Global Financial Crisis. The collapse of Lehman and Fortis provide vivid illustrations that national supervisors ultimately choose for their national interest in crisis management.
Augmented inflation targeting: Le roi est mort, vive le roi
Richard Baldwin, Daniel Gros, 17 April 2013
The Bank of Japan recently embraced inflation targeting – a decade and a half after academics recommended it (Krugman 2013). But this is not inflation targeting as conceived before the Global Crisis.
The much-needed EU pivot to east Asia
Patrick A Messerlin, 16 April 2013
The EU is facing formidable challenges. The economic crisis is far from over in many Eurozone and non-Eurozone member states. The EU’s current macroeconomic and budgetary policies are not politically sustainable at the EU’s current anaemic growth rate.
Are Germans really poorer than Spaniards, Italians and Greeks?
Paul De Grauwe, Yuemei Ji, 16 April 2013
Rarely have statistics been misused so much for political purposes as when recently the ECB published the results of a survey of household wealth in the Eurozone countries (2013a).1 From this survey it appeared that the median German household had the lowest wealth of all Eurozone countries.
How the EZ crisis is permanently changing EU institutions
Stefano Micossi, 15 April 2013
CEPR Policy Insight is available to download free of charge here.
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- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
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- The case for 4% inflationBall
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford
CEPR Policy Research
- The "Greatest" Carry Trade Ever? Understanding Eurozone Bank RisksAcharya, Steffen
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein
- Monetary Policy and Rational Asset Price BubblesGalí
- How the EZ crisis is permanently changing EU institutionsMicossi
- WTO 2.0: Global governance of supply-chain tradeBaldwin
- Is US economic growth over? Faltering innovation confronts the six headwindsGordon
- The economic crisis: How to stimulate economies without increasing public debtWood
- Austerity: Too Much of a Good Thing?Corsetti