The IMF, together with CEPR and the Central Bank of Ireland, put on a conference that drew lessons from Ireland’s bailout package titled “Ireland: Lessons from its Recovery from the Bank-Sovereign Loop”. This column summarises the contributions by Eichengreen, Fatás and Schoenmaker, as well as panel comments by Christine Lagarde, Benoît Coeuré, Michael Noonan, and Valdis Dombrovskis.
The Editors, 17 November 2015
Daniel A. Dias, Mark L. J. Wright, 13 November 2015
Measured as a percentage of its GDP, Greece’s debt is higher than that of Portugal and Ireland. This column discusses a range of new techniques for measuring the debts of Greece, Ireland, and Portugal. It argues that plausible alternative measures of indebtedness suggest that Greece is anywhere from as much as 50% more indebted than Portugal and Ireland to as little as half as indebted. The most reasonable measures imply that Greece is far less indebted than is commonly reported.
Stefan Gerlach, Reamonn Lydon, Rebecca Stuart, 21 July 2015
Despite being a mainstay of macroeconomic theory for the past half century, the Phillips curve often receives the death knell from various commentators. These critiques often rely on results from data samples spanning relatively short periods. Using the case of Ireland, this column argues that short-term idiosyncrasies can explain the failure of the model in these contexts. Taking a longer historical view, the Phillips curve remains a useful macroeconomic model, at least in the Irish context.
Stephen Kinsella, Hamid Raza, Gylfi Zoega, 04 July 2015
Iceland and Ireland were both rocked by the fallout of the Global Crisis. This column argues that differences in currency arrangements affected the mechanisms of the boom and the collapse. Iceland’s banks collapsed because they did not have a lender of last resort in euros. Ireland did. But Iceland’s collapse and ensuing capital controls shifted the burden of debt restructuring onto foreign creditors to a much greater extent than in Ireland.
Fergal McCann, Tara McIndoe-Calder, 23 September 2014
The role of credit-fuelled property booms in the Global Crisis has received much high-profile attention in recent years. Using data on Irish small and medium enterprises, this column highlights an additional channel through which such booms can impact post-crisis growth. Firms having difficulty repaying their property-related debts divert resources away from hiring and investment. Property booms thereby induce misallocation of resources in both the boom and the bust.
Aerdt Houben, Jan Kakes, 30 July 2013
Financial cycles have increasingly diverged across members of the Eurozone. National macroprudential tools are thus key to managing financial imbalances and protecting Europe’s economic integration. This column discusses research suggesting that reasonable macroprudential policies by the GIIPS countries in the euro’s first decade would have helped avoid much pain in Italy, Portugal and Spain. Greece’s public debt problems were far too large and its banks could not have been shielded with macroprudential policies.
Daniel Gros, 27 November 2012
An integrated banking system saved Nevada after a local real estate boom turned to bust. Without an integrated banking system, the same wasn’t true of Ireland. This column argues that comparing Ireland and Nevada shows that banking union is far more important for Europe than current proposals of fiscal union. And, in the absence of a proper banking union that covers losses, it seems ever more likely that Europe will be pushed back towards nationally segmented financial markets.
Uri Dadush, Zaahira Wyne, Shimelse Ali, 24 July 2012
The US and the Eurozone are slowly recovering after the bursting of their huge housing bubbles. Yet the hardest-hit states in the US have adjusted more rapidly than the most troubled European economies. This column examines differences between the US and Eurozone monetary unions that can help explain why.
Tito Boeri, 20 July 2012
Solving the EZ crisis will almost certainly involve some financial transfers in exchange for some loss of sovereignty. This column suggests a guiding principle for which policies should be under EZ control. Transfers of authority to supranational bodies must make a no-further-bailout clause credible.
Christian Hott, Terhi Jokipii, 29 March 2012
Visit Ireland and Spain and you will find row upon row of empty houses – the remnants of a housing boom turned bust. Were low interest rates to blame? This column looks at the effect of a deviation in interest rates from the Taylor rule and finds that keeping interest rates ‘too low’ can explain up to 50% of the overvaluation of the property market in these countries and elsewhere.
Olivier N. Godart, Aoife Hanley, Holger Görg, 21 February 2012
When disaster strikes, what happens to foreign firms? Do they move away, leaving an already unstable economy even further off balance? Or do they sit on their sunk costs and help steady the ship? This column looks at data from Ireland during the recent financial turmoil.
Liam Delaney, James P Smith, Mark McGovern, 23 October 2011
Public-health interventions in Ireland during the 1940s were successful in dramatically reducing infant mortality. This column argues that in addition to any immediate benefits, they also had long-run effects by improving the health of the adults who were affected as children, especially those from lower socio-economic backgrounds.
Philip R. Lane, 07 October 2011
Philip Lane talks to Viv Davies about Ireland’s export-led recovery; they also discuss the interplay between banking and sovereign risk in Europe. Lane presents his and other economists’ proposals for European Safe Bonds and a reform agenda for the Eurozone. The interview was recorded on 05 October 2011. [Also read the transcript.]
Willem Buiter, Ebrahim Rahbari, Juergen Michels, 06 September 2011
The Eurozone money transfer system, TARGET2, has huge imbalances whose meaning is subject to much debate. This column introduces a new CEPR Policy Insight by Citigroup Chief Economist Willem Buiter and co-authors that sorts out the issues. It argues that the imbalances show some banks can’t fund themselves without public support. This is a wakeup call – Eurozone banking systems must rapidly be put on sound footing.
Willem Buiter, Ebrahim Rahbari, Juergen Michels, 06 September 2011
The Eurozone money transfer system, TARGET2, has huge imbalances whose meaning is subject to much debate. This Policy Insight by Citigroup Chief Economist Willem Buiter and co-authors argues that the imbalances show some banks can’t fund themselves without public support.
Harald Hau, 27 July 2011
Last week, the European heads of government added €109 billion to the existing €110 billion rescue plan for Greece. As Europe’s financial sector would have otherwise taken a huge hit, this column address the question: How did the financial sector manage to negotiate such a gigantic wealth transfer from the Eurozone taxpayer and the IMF to the richest 5% of people in the world?
Roel Beetsma, Benjamin Bluhm, Massimo Giuliodori, Peter Wierts, 01 July 2011
Fiscal policy in EU countries is suffering from a calamity of credibility. The fiscal figures get steadily worse as governments move from planning to implementation to retrospective reporting. In order to regain its reputation, this column argues that the EU should improve its fiscal institutions and the EU countries should take more ownership of EU fiscal rules.
Karl Whelan, 09 June 2011
In a recent Vox column, Hans Werner Sinn of the prestigious Institute for Economic Research claims that the German Bundesbank is effectively propping up banks across the Eurozone’s periphery. He adds that doing this risks a major crisis. Here, Karl Whelan of University College Dublin argues that Professor Sinn’s analysis is incorrect and that his policy prescriptions are extremely unhelpful and even dangerous.
Charles Wyplosz, 29 April 2011
Restructuring is a taboo word in Brussels. This column argues that debt restructuring may be a viable option for some of the countries on Europe’s highly indebted periphery.
Richard Portes, 26 April 2011
What next for Ireland? This column by CEPR President Richard Portes makes the case that the country should restructure its debt.