Political Credit Cycles: The Case of the Euro Zone

Jesús Fernández-Villaverde, Luis Garicano, Tano Santos,

Date Published

Sun, 03/24/2013

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www.cepr.org/pubs/dps/DP9404.asp.asp

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financial crisis, Political Economy, bubbles, Eurozone crisis

Should the role of preparing budgetary projections be delegated to an independent agency?

Rossana Merola, Javier J. Pérez 01 May 2013

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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. Explanatory factors for these misalignments include large GDP shocks and fiscal-stimulus packages adopted on the run. Beyond these explanations, there is also a distinct lack of both transparency and realistic accounts of the facts.

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Topics:  Global crisis Monetary policy

Tags:  fiscal policy, forecasting, Eurozone crisis

Current-account surpluses in the Eurozone: Should they be reduced?

Alexandr Hobza, Stefan Zeugner 26 April 2013

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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. The high deficits in the Eurozone periphery prior to the crisis were matched by high surpluses in 'core' countries, most notably Germany.

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Topics:  Europe's nations and regions

Tags:  imbalances, Eurozone crisis

Job placement and displacement: Evidence from a randomised experiment

Bruno Crépon, Esther Duflo, Marc Gurgand, Roland Rathelot, Philippe Zamora 24 April 2013

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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.

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Topics:  Labour markets

Tags:  unemployment, Eurozone crisis, youth unemployment, graduates

Fighting financial protectionism

Dirk Schoenmaker 18 April 2013

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 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. Reform of global governance, guided by the G20 and executed by the Financial Stability Board, has so far focused on soft law solutions (Arner and Taylor 2009). Regulators adopt a consensual approach towards the setting of international standards.

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Topics:  Global crisis International finance

Tags:  protectionism, Eurozone crisis

Augmented inflation targeting: Le roi est mort, vive le roi

Richard Baldwin, Daniel Gros 17 April 2013

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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. Inflation targeting didn’t die, it evolved (as shown by the recent Vox eBook, Is inflation targeting dead? Central Banking After the Crisis.

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Topics:  Global crisis Monetary policy

Tags:  Japan, Eurozone crisis, augmented inflation targeting

The much-needed EU pivot to east Asia

Patrick A Messerlin 16 April 2013

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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. Less visible, but much more pernicious and damaging, is the lessening of competition in many sectors due to the past several years of crisis, a trend that is evident to varying degrees across all EU member states.

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Topics:  International trade

Tags:  EU, Japan, Eurozone crisis, Taiwan

Are Germans really poorer than Spaniards, Italians and Greeks?

Paul De Grauwe, Yuemei Ji 16 April 2013

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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. Figure 1 summarises the main results for the most significant Eurozone countries.

Figure 1. Net wealth of median households (1000€)

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Topics:  Europe's nations and regions

Tags:  Germany, Eurozone crisis

How the EZ crisis is permanently changing EU institutions

Stefano Micossi,

Date Published

Mon, 04/15/2013

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URL

http://www.cepr.org/pubs/PolicyInsights/PolicyInsight65.pdf

CEPR Policy Insight is available to download free of charge here.

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Eurozone crisis

Measuring the credit crunch

Michiel Bijlsma, Andrei Dubovik, Bas Straathof 15 April 2013

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How do we estimate the impact of a credit crunch during a crisis? Comparing the value of production before and after the crisis may be misleading. A firm might have produced less because it could not obtain credit, but it might also have produced less because the demand for its products dropped or was expected to do so in the near future. This means that we have to disentangle the effects on production of the reduction in credit supply from the effects that are due to a decline in credit demand.

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Topics:  Global crisis International finance

Tags:  Eurozone crisis

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