Europe is in the grip of three interrelated crises: a balance-of-payments crisis, a sovereign-debt crisis and a banking crisis. Policymakers have primarily focused on the sovereign-debt and banking crises. However, a credible strategy for getting the Eurozone back on track needs to address the problem of its large internal imbalances.
Hans-Werner Sinn, Akos Valentinyi, 9 March 2013
The Brazilian competitiveness cliff
Otaviano Canuto, Matheus Cavallari, José Guilherme Reis, 27 February 2013
The Brazilian economy is facing considerable competitiveness challenges (Bonelli and Pinheiro 2012). After several years of strong expansion, the recent slowdown seems related to supply-side difficulties stemming from a wide range of inefficiencies and rising costs, rather than insufficient aggregate demand.
Why do large movements in exchange rates have small effects on international prices?
Mary Amiti, Oleg Itskhoki, Jozef Konings, 19 February 2013
Exchange rate moves have surprisingly small effects on prices. This apparent ‘disconnect’ is one of the central puzzles in international macroeconomics. It is also a continual headache for policymakers who rely on exchange rates to accommodate the adjustment of global (current account) imbalances.
Value-added exchange rates
Rudolfs Bems, Robert Johnson, 6 December 2012
Real effective exchange rates (REERs) are widely used to gauge competitiveness. Yet conventional REERs, based on gross trade flows and consumer price indexes (CPIs), are not well suited to that role when imports are used to produce exports – i.e., with vertical specialisation in trade.
Export shares, price competitiveness and the ‘Spanish paradox’
Miguel Cardoso, Mónica Correa-López, Rafael Doménech, 24 November 2012
Since the launch of the euro, Spanish exporters have been successful in containing the loss of their export share in world markets. This is in contrast to several advanced economies that have experienced significant losses as a result of globalisation and the gain of exports shares by many emerging countries.
Triggering competitiveness: A 'decalogue' from new firm-level evidence
Carlo Altomonte, Tommaso Aquilante, Gianmarco I.P. Ottaviano, 23 August 2012
The ability to 'grow out' of the crisis is now widely recognised as the only viable long-term option for maintaining the Eurozone (Delbecque 2012), keeping the EU vibrant and assuring the sustainability of the European social-market-economy model.
Saving the euro requires restoring Spain’s competitiveness
Bernard Delbecque, 30 July 2012
The Eurozone crisis has confirmed that a monetary union is more resistant to market pressures than a fixed exchange rate regime. This fact explains why policymakers have been able to muddle through the current crisis by producing compromises and gaining time.
Internal adjustment of the real exchange rate: Does it work?
Zsolt Darvas, 6 July 2012
There is an intense policy debate on ‘internal adjustment’, i.e. productivity improvements and wage cuts to restore price competitiveness, when depreciation of the nominal exchange rate is not available. The most frequently mentioned examples for internal adjustment are Ireland and the Baltic countries.
Myths about trade, jobs, and competitiveness
Charles Roxburgh, Richard Dobbs, Jan Mischke, 31 May 2012
This is not a happy time for mature economies. They are facing:
Still standing: Global crisis and European firms
Gábor Békés, László Halpern, Balázs Muraközy, Miklós Koren, 18 May 2012
European economies are facing the greatest macroeconomic challenges since the oil price shock of the 1970s. The recovery following the collapse of economic activity and trade during the 2008/2009 global crisis has proven short lived, and European countries now face a crisis in the Eurozone.
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Helicopter money as a policy optionReichlin, Turner, Woodford
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford
CEPR Policy Research
- The "Greatest" Carry Trade Ever? Understanding Eurozone Bank RisksAcharya, Steffen
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein
- Monetary Policy and Rational Asset Price BubblesGalí
- How the EZ crisis is permanently changing EU institutionsMicossi
- WTO 2.0: Global governance of supply-chain tradeBaldwin
- Is US economic growth over? Faltering innovation confronts the six headwindsGordon
- The economic crisis: How to stimulate economies without increasing public debtWood
- Austerity: Too Much of a Good Thing?Corsetti