In the last few weeks the press and several blogs have been engaged in a debate on the classic question of whether central banks should rely on headline inflation or core inflation (defined as headline inflation excluding energy and food) to obtain a signal for medium-term inflationary pressures.
ECB Reaction Functions and the Crisis of 2008
Stefan Gerlach, John Lewis, 4 July 2011
Vox users can download CEPR Discussion Paper 8472 for free here.
Should the ECB use core inflation as a signal for medium-term inflation?
Michele Lenza, Lucrezia Reichlin, 24 June 2011
The ECB’s three mistakes in the Greek crisis and how to get sovereign debt right in the future
Jeffrey Frankel, 16 May 2011
By now just about everybody agrees that the European bailout of Greece has failed (see for example Darvas et al. 2011). The debt will have to be restructured.
The troika should target the trade and the income balance deficits
Ricardo Cabral, 15 May 2011
Greece, then Ireland, and more recently Portugal have applied for EU and IMF financial aid. A troika of European Commission, ECB, and IMF officials have negotiated accords for ambitious adjustment programmes with either two or three main components, as mandated by the Eurogroup and the Ecofin Ministers (2010a; 2010b; 2011):
Vox’s annual break and some holiday reading tips
Richard Baldwin, 25 December 2010
After months of preparatory work, Vox was launched in June 2007. The first weeks were going well – and then the subprime crisis struck.
The European debt crisis: Worrisome delusions
Charles Wyplosz, 19 December 2010
Lorenzo Bini-Smaghi – Member of the ECB's Executive Board – has produced a brilliant defence of the no-default strategy currently pursued by the Eurozone authorities (Financial Times 2010).
His arguments are straightforward.
All together now? Arguments for a big-bang solution to Eurozone problems
Daniel Gros, 5 December 2010
I hope that everything I write in this column turns out to be irrelevant; I very much hope that it will not be necessary to resort to such drastic actions. Economic logic, however, suggests that it might soon represent the least bad solution to a crisis which keeps getting worse. That said…
The seniority conundrum: Bail out countries but bail in private, short-term creditors?
Daniel Gros, 5 December 2010
European policy-makers might come to regret the statement of the Eurogroup (Eurogroup 2010) that announced the outline of the new European Stability Mechanism that will replace the temporary EFSF from 2013.
Reforming the Stability Pact: Focus on financial supervision
Guido Tabellini, 5 October 2010
The economic governance of the Eurozone is under repair. After months of work and deep thinking involving several institutions, including the ECB and the governments of France and Germany, the Commission has proposed a reform plan.
The reform is aimed at the two problems that the financial crisis of Greece highlighted:
ECB interest rate policy and the “zero lower bound”
Stefan Gerlach, John Lewis, 27 July 2010
Since the start of the financial crisis, central banks across the world have cut interest rates substantially. In Japan, the US, the Eurozone and elsewhere, short-term interest rates controlled by the central bank are at or close to zero.
There are two reasons why this may have happened.
- Secular stagnation: Facts, causes, and cures – a new Vox eBookTeulings, Baldwin
- Can large primary surpluses solve Europe’s debt problem?Eichengreen, Panizza
- The unrecognised benefits of grade inflationBoleslavsky, Cotton
- The US manufacturing base is surprisingly strongMoran, Oldenski
- Long-term damage of the US court’s Argentinian debt rulingFrankel
- 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
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman