The fallout from the Global Crisis and its aftermath has been deeply damaging for European output. This column uses a growth accounting framework to explore the pre-Crisis and post-Crisis growth dynamics of several European countries. The weakness of post-Crisis real GDP in the Eurozone manifested itself in a decline in employment and average hours worked. However, decomposing growth for the Eurozone as a whole conceals significant differences across European countries, in both real GDP growth and its factor inputs.
Kevin Daly, Tim Munday, Saturday, November 28, 2015 - 00:00
Guido Tabellini, Monday, September 7, 2015 - 00:00
What are the main lessons to be drawn from the European financial crisis? This column argues that the Eurozone really is at a major cross-roads. Without a common fiscal policy, and without adequate institutions for aggregate demand management, European leaders have to constantly alter the rules. Currency risk will be the major concern of financial markets, much more than in the past, due to how Europe has dealt with the Greek crisis.
Stefano Micossi, Monday, September 7, 2015 - 00:00
The sovereign debt and banking crises of 2010-12 have led to significant changes in the institutions of the Eurozone. The credibility of common policies regarding budgetary discipline and economic convergence remains weak. This chapter proposes that the way forward is to gradually bring common economic policies under the oversight of the European Parliament and to strengthen the role of the Commission. The picture must be completed with getting national parliaments more involved in the European policy process. The present state of the Eurozone could be seen as a sort of political equilibrium, likely to be economically unstable.
Philip R. Lane, Monday, September 7, 2015 - 00:00
In the lead up to the global financial crisis, there was a substantial credit boom in advanced economies. In the Eurozone, cross-border flows played an especially important role in the boom-bust cycle. This column examines how the common currency and linkages between member states contributed to the Eurozone crisis. A very strong relationship between pre-crisis levels of external imbalances and macroeconomic performance since 2008 is observed. The findings point to the importance of delinking banks and sovereigns, and the need for macro-financial policies that manage the risks associated with excessive international debt flows.
Paul De Grauwe, Monday, September 7, 2015 - 00:00
Economists were early critics of the design of the Eurozone, though many of their warnings went unheeded. This column discusses some fundamental design flaws, and how they have contributed to recent crises. National booms and busts lead to large external imbalances, and without individual lenders of last resort – national central banks – these cycles lead some members to experience liquidity crises that degenerated into solvency crises. One credible solution to these design failures is the formation of a political union, however member states are unlikely to find this appealing.
Stefano Neri, Stefano Siviero, Saturday, August 15, 2015 - 00:00
EZ inflation has been falling steadily since early 2013, turning negative in late 2014. This column surveys a host of recent research from Banca d’Italia that examined the drivers of this fall, its macroeconomic effects, and ECB responses. Aggregate demand and oil prices played key roles in the drop, which has consistently ‘surprised’ market-based expectations. Towards the end of 2014 the risk of the ECB de-anchoring inflation expectations from the definition of price stability became material.
Ashoka Mody, Guntram Wolff, Thursday, August 13, 2015 - 00:00
The ECB believes that most Eurozone banks are out of the woods in terms of non-performing assets and capital shortfalls. This column argues that small and medium-sized banks – and among them the unlisted banks – remain under considerable stress. These banks are in the worst affected Eurozone countries, and their continued stress significantly impedes the flow of credit and also reduces lending. Policymakers need to seriously consider how and when to restructure and resolve these banks.
Reuven Glick, Andrew K Rose, Monday, June 15, 2015 - 00:00
The Economic and Monetary Union in Europe has recently been the source of a lot of pain. Its economic benefits often seem a lot harder to measure. This column reconsiders earlier opinions on the trade effects of currency unions using the latest data and methodologies. It suggests the euro has at least a mildly stimulating effect on exports. However, the switches and reversals across methodologies do not make allowances for any bold statements.
Urszula Szczerbowicz, Natacha Valla, Thursday, April 9, 2015 - 00:00
Eric Bartelsman, Filippo di Mauro, Ettore Dorrucci, Tuesday, March 17, 2015 - 00:00
David Amiel, Paul-Adrien Hyppolite, Sunday, March 15, 2015 - 00:00
Giuseppe Bertola, Anna Lo Prete, Saturday, February 28, 2015 - 00:00
Marco Buti, Nicolas Carnot, Tuesday, February 24, 2015 - 00:00
Sebastian Gechert, Andrew Hughes Hallett, Ansgar Rannenberg, Thursday, February 26, 2015 - 00:00
Sebastian Gechert, Andrew Hughes Hallett, Ansgar Rannenberg, Wednesday, February 25, 2015 - 00:00
Lars P Feld, Christoph M Schmidt, Isabel Schnabel, Benjamin Weigert, Volker Wieland, Friday, February 20, 2015 - 00:00
Plamen Iossifov, Jiří Podpiera, Monday, February 16, 2015 - 00:00
Thomas Philippon, Tuesday, February 10, 2015 - 00:00
Julio Escolano, Laura Jaramillo, Carlos Mulas-Granados, Gilbert Terrier, Friday, February 27, 2015 - 00:00
Paolo Manasse, Tuesday, January 27, 2015 - 00:00