Unity in diversity: Protecting the common market with divergent macroprudential policies

Aerdt Houben, Jan Kakes, 30 July 2013

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The credit crisis and ensuing sovereign crisis powerfully illustrate the limitations of traditional macroeconomic policies to contain financial imbalances. Despite debate on the desirability to dampen credit cycles and asset-price fluctuations, countries have long been reluctant to include this in policy objectives.

Topics: Global crisis, International finance
Tags: Eurozone crisis, GIIPS, Greece, Ireland, Italy, macroprudential tools, Portugal, Spain

Why economics needs economic history

Kevin Hjortshøj O’Rourke, 24 July 2013

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The current economic and financial crisis has given rise to a vigorous debate about the state of economics, and the training which graduate and undergraduates economics students are receiving. Importantly, among those arguing most strongly for a change in the way that young economists are trained are the ultimate employers of these students, in both the private and the public sector.

Topics: Economic history
Tags: Eurozone crisis, global crisis

How to limit the ECB’s OMT?

Harald Benink, Harry Huizinga, 12 July 2013

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Speaking about the Outright Monetary Transactions (OMT) facility during a recent press conference Mario Draghi, ECB President, said that “frankly, when you look at the data, it’s really very hard not to state that OMT has been probably the most successful monetary policy measure undertaken in recent times” (Draghi 2013).

Topics: Europe's nations and regions
Tags: banking union, Eurozone crisis, OMT

Short-time work: Does it save jobs?

Almut Balleer, Britta Gehrke, Wolfgang Lechthaler, Christian Merkl, 12 July 2013

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Short-time work means that the government subsidises the reduction of the working time of an employee to prevent firing. Many countries allow a firm to use this instrument when the demand for its products is lower than its production potential. Since more firms face a shortfall of demand in recessions, there is a rule-based component of short-time work.

Topics: Europe's nations and regions, Labour markets
Tags: Eurozone crisis, Germany, jobs, short-time work

The impact on the financial sector of long-term low nominal interest rates

Viral Acharya, Richard Portes, Richard Reid, 3 July 2013

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The Centre for Economic Policy Research (CEPR) recently organised a conference at the Brewers’ Hall, London, on 10 June 2013 titled ‘A long-term environment of low nominal interest rates: what are the consequences for the financial sector’?

Topics: Monetary policy
Tags: Eurozone crisis, liquidity trap, quantitative easing, Vox Views, zero lower bound

Redistribution policies at the root of the Eurozone Crisis

Giuseppe Bertola, 28 June 2013

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Not only the founding fathers of the EU, but also financial market participants appear to have believed that participation in common markets and adoption of common institutions should lead to cultural and economic convergence.

Topics: Europe's nations and regions
Tags: Eurozone crisis

Financial imbalances and cycles: Do they matter for the general public?

Livio Stracca, 25 June 2013

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Boom and busts in asset prices and credit and, more generally, ‘financial imbalances’ have been the subject of a lot of public attention in the wake of the global financial crisis and the Eurozone crisis.

Topics: Global crisis, International finance
Tags: Eurozone crisis

Spillovers: Why macro-fiscal policy should be coordinated in economic unions

Gerald A. Carlino, Robert P Inman, 24 June 2013

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The recent Great Recession in the US and Europe has generated renewed interest in the management of macro-stabilisation fiscal policy in economic unions. The received wisdom among economists is that such fiscal policies can only be managed efficiently by an overarching central government. Oates, in his classic treatise on fiscal federalism, concludes:

Topics: Europe's nations and regions, Macroeconomic policy
Tags: Eurozone crisis, fiscal policy

The roots of the Italian stagnation

Paolo Manasse, 19 June 2013

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Italy is currently facing its worst recession in recent history, having lost about 8.5% of GDP between 2007 and 2013. The current situation is, to a large extent, the result of the Eurozone crisis and of the tough fiscal-austerity measures introduced across Europe, and particularly in Italy.

Topics: Europe's nations and regions
Tags: competitiveness, Eurozone crisis, Italy

The wisdom of Karlsruhe: The OMT Court case should be dismissed

Francesco Giavazzi, Richard Portes, Beatrice Weder di Mauro, Charles Wyplosz, 12 June 2013

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This week the German Constitutional Court in Karlsruhe is considering a case in which the plaintiffs oppose the Outright Monetary Transactions (OMT) programme announced last September by the ECB. The court will consider whether the ECB overstepped its mandate and thus imposed undue risks on German taxpayers.

Topics: Europe's nations and regions
Tags: Eurozone crisis, OMT, Outright Monetary Transactions

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