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.

Topics: Global crisis, International finance
Tags: Eurozone crisis

The Eurozone crisis and EU institutional change: A new CEPR Policy Insight

Stefano Micossi, 15 April 2013

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Since the Eurozone crisis blew up in 2010, a series of decisions taken at crisis summits have massively centralised at EU level executive powers over national economic policies.

Topics: EU institutions, Europe's nations and regions
Tags: Eurozone crisis

Balance-sheet repairs in European banks

Nadege Jassaud, Heiko Hesse, 13 April 2013

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Much has been achieved to address the EU financial crisis.1 Since 2011, EU banks have boosted their capital adequacy ratios, partly due to the second EU-wide stress-testing and recapitalisation exercise led by the European Banking Authority.

Topics: Europe's nations and regions, Global governance
Tags: balance sheets, Banking crisis, Eurozone crisis

Time for the Eurozone to shift gear: Issuing euros to finance new spending

Biagio Bossone, 8 April 2013

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The crisis in peripheral Europe is deepening and spreading to core Europe, affecting France and now threatening Germany (Wood 2013). Political concerns in a number of Eurozone countries undermine confidence within the region. The Cyprus blunder has added to overall nervousness (see Wyplosz 2013).

Topics: Monetary policy
Tags: Cyprus, Eurozone crisis

Budget balance, structural unemployment and fiscal adjustments: The Spanish case

Javier Andrés, Rafael Doménech, 5 April 2013

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One of the most important questions in the current process of fiscal consolidation in many developed economies concerns the size and the pace of the adjustment. An excessive and/or too-fast fiscal retrenchment can have dramatic effects on unemployment and growth, while if it is too slow, it can prove to be ineffective and lack credibility in the eyes of the financial markets.

Topics: Europe's nations and regions
Tags: Eurozone crisis, fiscal policy, Spain, structural adjustment, unemployment

A banking union for the Eurozone

Giovanni Dell'Ariccia, Rishi Goyal, Petya Koeva-Brooks, Thierry Tressel, 5 April 2013

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Before the crisis, the common currency and single market promoted financial integration. Banks and financial institutions operated with ease across countries; credit went where it was in demand; and portfolios became increasingly more diversified. The interbank market functioned smoothly, and monetary conditions were relatively uniform across the Eurozone.

Topics: EU institutions, EU policies
Tags: banking union, Eurozone crisis, regulation

The decoupling of the US and European economies: Evidence from nowcasting

Lucrezia Reichlin, Domenico Giannone, Jasper McMahon, Saverio Simonelli, 29 March 2013

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One of the most interesting features of recent business-cycle history is the decoupling of US real economic activity from that of the Eurozone (CEPR 2012, ECB 2013). CEPR's Euro Area Business Cycle Dating Committee estimates that the Eurozone entered a new recession in the third quarter of 2011, something the US has so far avoided.

Topics: Europe's nations and regions, Frontiers of economic research
Tags: decoupling, Eurozone crisis, Germany, nowcasting

The capital controls in Cyprus and the Icelandic experience

Jon Danielsson, 28 March 2013

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The Cypriot government, European authorities and the IMF have concluded that capital controls are the best way to prevent a total collapse of the Cypriot financial system. Motivated by the obvious fear that anybody with money left over in Cyprus will seek to take their money out as soon as possible, temporary capital controls are to be put in place to prevent this.

Topics: EU institutions, Macroeconomic policy
Tags: capital controls, Cyprus, Eurozone crisis, Iceland

International capital flows during crises: Gross matters

Fernando A Broner, Tatiana Didier, Aitor Erce, Sergio Schmukler, 28 March 2013

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The financial crises of the last three decades have spurred interest in the dynamics of international capital flows. Most of the work on the topic has focused on the behaviour of net capital flows, namely the difference between the foreign purchases of domestic assets (or capital inflows by foreigners) and the domestic purchases of foreign assets (or capital outflows by domestic agents).

Topics: Global crisis
Tags: Eurozone crisis, financial crisis, gross capital flows

A modern history of fiscal prudence and profligacy

Ariel Binder, Paolo Mauro, Rafael Romeu, Asad Zaman, 27 March 2013

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Considering the major impact of the global economic and financial crisis on the fiscal accounts of the main advanced economies, and their widely differing policy responses, how confident should we be that each of these countries remains fiscally prudent?

Topics: Global crisis, Macroeconomic policy
Tags: Eurozone crisis

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