This week’s political events in the Netherlands and France which look likely to lead to government dissolution, have been interpreted as a set-back for the pace of fiscal consolidation in Europe with popular resentment punishing incumbent leaders (“Leaders in Austerity Backlash” was the headline of the Financial Times on 24 April 2012).
Fiscal consolidation: Too much of a good thing?
John Van Reenen, 27 April 2012
Divergence of fortunes in recoveries
Prakash Loungani, M Ayhan Kose, Marco E Terrones, 24 April 2012
The last global recession was the deepest of the four recessions the world has experienced since World War II. Each recession led to fears of economic apocalypse but the global economy recovered in a year or two. Because of the depth of the last recession, some analysts worried that the world would relive the Great Depression of the 1930s.
Fiscal austerity and policy credibility
Marco Buti, Lucio R Pench, 20 April 2012
The renewed phase of tension in Europe, and the Eurozone in particular, since the second half of 2011, with the prospect of a double-dip recession alternating with that of a sovereign-debt crisis, has reignited the debate on fiscal austerity, to which European governments have been committed since the end of the most acute phase of the crisis in 2009.
Is the euro rescue succeeding? An update
Uri Dadush, Zaahira Wyne, 20 April 2012
The current gyrations of sentiment over government-bond spreads are diverting attention from the real issue – the Eurozone periphery needs a big realignment towards the tradable sector to reignite growth sustainably.
Too early to sound the alarm
Manfred J M Neumann, 17 April 2012
Debt finance of public consumption has clearly gone too far in several countries. Too far in the sense that it has reached if not exceeded the borderline of sustainability. Have austerity measures meanwhile gone too far, too?
The EZ breakup contest: Take ignorance seriously
Richard Baldwin, 10 April 2012
The Eurozone might not survive in its current form. Buiter and Rahbari (2012) put a likelihood of 50% on Greek exit – an event that would be something between an historic event and a global economic catastrophe (depending on how it was handled).
The problems of European monetary union – asymmetric shocks or asymmetric behaviour?
Andrea Boltho, Wendy Carlin, 31 March 2012
Much of the literature that was sceptical of the prospective success of the euro feared the effects of Mundellian asymmetric shocks on an area which (unlike the US) had little inter-country labour mobility and no common fiscal policy.
From vicious to virtuous: A five-point plan for Eurozone restoration
Marco Buti, Pier Carlo Padoan, 27 March 2012
Download CEPR Policy Insight No. 61 here .  http://voxeu.org/sites/default/files/file/PolicyInsight61.pdf
From a vicious to a virtuous circle in the Eurozone - the time is ripe
Marco Buti, Pier Carlo Padoan, 27 March 2012
The economic and financial crisis in the Eurozone is in its fourth year. In late 2011, it had evolved dangerously into a vicious circle of sluggish growth, tensions in sovereign debt markets and banking sector fragility.
Fiscal consolidations for debt-to-GDP ratio containment? Maybe … but with much care
Gianluca Cafiso, Roberto Cellini, 20 March 2012
In recent time a wide debate has been developing concerning the effects of restrictive fiscal policies on the dynamics of the debt-to-GDP ratio (eg Corsetti and Müller 2012). The debate is nourished by the current experience of EU countries, where fiscal-consolidation policies are implemented.
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- The ECB’s stealth bailoutSinn
- 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
Adelman, 28 October 2013
Reichlin, Giugliano, 7 November 2013
Holmes, McGrattan, Prescott
Beck, De Haas, Ongena
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