The case for temporary inflation in the Eurozone

Stephanie Schmitt-Grohe, Martín Uribe, 16 September 2012

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URL: www.cepr.org/pubs/dps/DP9133.asp
Topics: Labour markets
Tags: Eurozone crisis, Great Recession, unemployment, wages

What Germany should fear most is its own fear

Paul De Grauwe, Yuemei Ji, 18 September 2012

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The large expansion of TARGET2 claims and liabilities since the start of the sovereign debt crisis has led to fears that countries like Germany would lose vast amounts if the Eurozone broke up (Sinn and Wollmershäuser 2012)1.

Topics: Europe's nations and regions, Monetary policy
Tags: Eurozone crisis, Germany, TARGET2

Expectations and asset prices: Keynes meets Hayek

Giovanni Cespa, Xavier Vives, 18 September 2012

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The financial crisis has vividly put into question the alignment of asset prices and fundamental values.

Topics: EU policies, Frontiers of economic research, Monetary policy
Tags: ECB, Eurozone crisis, Hayek, Keynes, sovereign bonds

Why early sovereign default could save the euro

Harald Hau, Ulrich Hege, 8 September 2012

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The crisis in the Eurozone is primarily a debt crisis. Debt overhang, whether public or private (as it originally was in Ireland and Spain), impedes investment and growth (Reinhart and Rogoff 2010).

Topics: EU policies
Tags: Eurozone crisis

The limits of a purely intra-euro rebalancing strategy

Zsolt Darvas, 5 September 2012

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The perceived failure of Greece, Portugal, and Spain to achieve sustainable external positions and economic growth inside the Eurozone is a major factor behind the current crisis. Their trade deficits should be turned to sizeable surpluses in which real exchange rate developments should play a role.

Topics: EU policies, Europe's nations and regions, Monetary policy
Tags: Eurozone crisis, exchange-rate policy, Greece, Portugal, Spain

Africa gets hit by Eurozone crisis

Monica Eaton, Michael J Ferrantino, 4 September 2012

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There is currently an asymmetric contraction in merchandise trade focused on Europe. Data from CPB World Trade Monitor show real Eurozone imports declining by 7.7% in the 12 months ending May 2012, at a time when real world trade has expanded by 3.0%.

Topics: Development, Europe's nations and regions, International trade
Tags: Africa, Eurozone crisis, trade

Time for international monetary coordination

Paolo Manasse, 3 September 2012

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Many observers of the European Sovereign debt saga had long realised that the ECB was the only European institution up to the task of avoiding a breakup of the euro (see for instance Eichengreen 2009 on this site). The newly forged institutions, the ESFS/ESM, are both ill designed and inadequately funded (Manasse 2011).

Topics: EU policies, Global governance, Monetary policy
Tags: Eurozone crisis, monetary policy

Jackson Hole, the crisis and policy responses: A new orthodoxy

Richard Wood, 31 August 2012

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Demand, output, manufacturing activity and exports are weakening in many parts of the industrialised world. Quantitative easing policies have generally run their course, as interest rates are at the zero bound or thereabouts. In the Eurozone it is questionable whether the ‘one-size-fits-all’ policy interest rate approach is helpful or meaningful, or whether it can be sustained.

Topics: Global crisis, Macroeconomic policy
Tags: Eurozone crisis, global crisis, macroeconomic policy

Sovereign debt sustainability in Spain and Italy

William R. Cline, 30 August 2012

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After a brief easing in sovereign interest rates for Italy and Spain following nearly €1 trillion in LTRO (long-term refinancing operation) lending to Eurozone banks by the ECB at the turn of the year, in the second quarter of 2012 these rates rebounded.

Topics: Europe's nations and regions, International finance
Tags: Eurozone crisis, Eurozone Debt Crisis, Italy, sovereign debt, Spain

Banking union and bank resolution: How should the two meet?

Thomas Huertas, María J Nieto, 26 August 2012

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In June the EU proposed two significant measures: banking union and a framework for bank resolution. The two should go hand in hand. But how?

Topics: EU policies, International finance
Tags: banking resolution, banking union, Eurozone crisis

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