Vicky Pryce, Friday, December 7, 2012 - 00:00

Vicky Pryce talks to Romesh Vaitilingam about her book, "Greekonomics: The euro crisis and why politicians don’t get it". They discuss the flaws in the original conception of the single currency, Greece’s dire recent economic experiences and how Greek and European policymakers have responded to the crisis. The interview was recorded at the Bristol Festival of Economics in late November 2012.

Alan J Auerbach, Yuriy Gorodnichenko, Monday, December 10, 2012 - 00:00

It's tough out there for policymakers seeking to stabilise economies, and shocks from abroad aren't helping. This column argues that for countries hit by recession, fiscal stimulus in another country might significantly stimulate demand back at home, softening the worse effects of the current crisis. The evidence suggests that transnational coordination of fiscal policy may well be more valuable than previously thought.

Dirk Schoenmaker, Sunday, December 9, 2012 - 00:00

Eurozone banking union discussions are full of questions about the scope of Eurozone microprudential bank supervision. Yet, this column argues that there is surprisingly little debate on the macroprudential supervision that is necessary to safeguard the wider European financial system. After all it is macro developments, such as fast rising housing prices, that lie at the heart of the ongoing crisis in Europe. To safeguard the financial system, Eurozone macroprudential tools should be under the ECB, separate from microprudential functions, with input from national central banks when differentiation is necessary.

Stefano Scalera, Riccardo Pacini, Friday, December 7, 2012 - 00:00

What mechanisms are necessary for the euro to survive? This column argues that recently proposed EU policy might have the answer. Having adopted a roadmap for enhanced economic policy coordination, a growth facility and a framework for enhanced debt issuance, the EU might now stave off the threat of Eurozone breakup. However, the road ahead will certainly be tough, the first crucial stumbling block being the design of a European Redemption Fund.

Alberto Alesina, Friday, November 30, 2012 - 00:00

Should debt-ridden and economically struggling Western governments be doing everything possible to reduce their deficits? Should we cut spending or hike taxes to reduce our debt-to-GDP ratios? This column argues that the answer is obvious: the cheapest, most effective and confidence-inspiring route is to cut spending. Coupled with other pro-growth policies, the evidence suggests that it is only really spending cuts that will spur private investment and economic recovery in Europe.

Charles Wyplosz, Monday, November 26, 2012 - 00:00

For the euro to survive, the recession must be halted without piling on more debt. This column argues that the unpalatable conclusion is that public debts must be written down. The massive moral hazard problem this will cause must be dealt with by making sure that public debts will never again be allowed to grow to unsustainable levels. To this end, decentralised US-style fiscal discipline is needed.

Marco Buti, Alessandro Turrini, Monday, November 12, 2012 - 00:00

Why aren’t Eurozone imbalances adjusting? This column argues that there is heartening evidence that they are. Labour markets are beginning to be reformed across Europe, thereby increasing countries’ competitiveness. However, the road ahead will surely long and hard; for external adjustment to really work, it is crucial that financial markets start to take a lead supportive role.

Michael J Lamla, Jan-Egbert Sturm, Friday, November 9, 2012 - 00:00

The Swiss National Bank (SNB) is again the focus of much debate, accused as it is of currency manipulation. This column outlines the effects of the SNB’s minimum exchange rate. On balance, the authors argue that the move is a boon, effectively enacting a much-needed relaxation of monetary policy within the Eurozone.

Mathias Hoffmann, Bent E. Sørensen, Friday, November 9, 2012 - 00:00

How do members of existing monetary unions share risk? Drawing on a decade of research, this column argues that fiscal transfers in fact make a limited contribution to economic coherence. In the context of Europe’s current crisis, the evidence suggests that unfinished capital market integration must be completed if we wish to see adequate and effective risk sharing.

Petra Gerlach-Kristen, Robert McCauley, Kazuo Ueda, Wednesday, November 7, 2012 - 00:00

Do incidental large-scale bond purchases have a global portfolio balance effect? This column argues that one country’s bond purchases can ease monetary conditions abroad. Whether this effect is welcome depends on the phase of the business cycle, but the authors emphasise that it is of paramount importance for resolving the current crisis that Eurozone policymakers closely consider the effects of large-scale bond buying.

Jens Nordvig, Tuesday, November 6, 2012 - 00:00

Conversations about the breakup of the Eurozone are changing. This column argues that an 'avoid breakup at all costs' dogmatism may not be a prudent view. Getting good data may well be difficult, but any arguments about the cost of a Eurozone breakup must be compared to the ongoing cost of the status quo.

Felix Roth, Lars Jonung, Felicitas Nowak-Lehmann, Monday, November 5, 2012 - 00:00

The Eurozone crisis has meant slow growth, rising unemployment, and social unrest. This column gauges the impact of all this on European citizens‘ opinions about the euro and EU institutions. Using Eurobarometer surveys, the authors find that, within the Eurozone, the crisis has only marginally lowered support for the euro but has led to a sharp fall in public trust in the ECB.

Aoife Hanley, Joaquín Monreal-Pérez, Monday, November 5, 2012 - 00:00

How can Spanish firms innovate to overcome strong economic headwinds? This column presents empirical evidence to show that, in a time of economic crisis, Spanish firms would do well to orient themselves toward foreign markets. The authors propose that there could well be mutiple – and durable – benefits to both the firms and the Spanish economy.

Dawn Holland, Jonathan Portes, Thursday, November 1, 2012 - 00:00

EU governments have individually embraced severe austerity programmes in an effort to avoid becoming the next Portugal. This column presents results from the National Institute Global Econometric Model suggesting that these individually rational polices are leading to collective folly. Keynes’ 'paradox of thrift' is in full swing since EU nations continue to act like small open economies while in fact they are a large closed economy.

Michael McMahon, Udara Peiris, Herakles Polemarchakis, Tuesday, October 30, 2012 - 00:00

‘Sterilisation’ - where purchases of assets by a central bank are offset by withdrawals - may help the ECB to control inflation. This column discusses how the ECB’s current approach may be fraught with danger, however. In a world where sovereign default risk is perceived to be likely, the ECB’s only real hope is that its approach makes a Eurozone default impossible.

Eduardo Cavallo, Eduardo Fernandez-Arias, Wednesday, October 17, 2012 - 00:00

The Eurozone body politic seems to be slowly learning the lessons for crisis management. This column argues that Latin America’s decades of financial crisis can provide key insights for Europe.

Christopher Sims, Friday, October 12, 2012 - 00:00

Nobel laureate, Christopher Sims, talks to Viv Davies about the institutional restructuring needed to put the Eurozone on a path to sustainable recovery. Sims contrasts the structural differences of the US, Japan and the UK with the Eurozone; they discuss the role of the ECB, eurobonds, a common fiscal commitment, and the rationale for country-level default. They also discuss Sims' prophetic paper on "The Precarious Fiscal Foundations of EMU" (1999), in which he wrote about the risks of a euro crisis.The interview was recorded in Brussels on 21 September 2012.

Indermit Gill, Martin Raiser, Tuesday, October 9, 2012 - 00:00

It is common these days to read and hear Europeans calling for a ‘new growth model.' This column argues that the end of complacency in Europe is a good thing, but this loss of confidence could be dangerous. It also discusses what needs to be done to make the European economic model different.

Jacob Funk Kirkegaard, Monday, October 8, 2012 - 00:00

Political pressures are rising again in Europe. This column argues that reactions in parliaments, central banks and on the street are well within the bounds of predictable reactions to hard times. These developments change nothing of significance in the calculus concerning the eventual success of the Eurozone crisis response.

Sebnem Kalemli-Ozcan, Elias Papaioannou, Wednesday, September 26, 2012 - 00:00

Is a banking union the answer to Europe’s woes? This column argues that banking union is no panacea – and it may actually make monetary policy harder. It urges Europe’s policymakers to re-evaluate their proposals.


CEPR Policy Research