The European sovereign debt crisis has revealed severe flaws in the design of the internal market. Both private and public borrowers had incentives for excessive borrowing, which have been created by deficits in the regulatory structure of financial markets. Capital requirements for banks were too low and had procyclical effects (Favara and Ratnovski 2012).
From the internal market to a banking union: A proposal by the German Council of Economic Experts
Peter Bofinger, Claudia M. Buch, Lars P Feld, Wolfgang Franz, Christoph M Schmidt, 12 November 2012
The doomsday cycle turns: Who’s next?
Simon Johnson, Peter Boone, 21 September 2012
There is a common problem underlying the economic troubles of Europe, Japan, and the US: the symbiotic relationship between politicians who heed narrow interests and the growth of a financial sector that has become increasingly opaque (Igan and Mishra 2011).
The first sovereign debt crisis in the EU
Jon Danielsson, Hermann Oskarsson, 11 September 2012
Today is not the first time Europe has suffered a sovereign-debt crisis. Twenty years ago another crisis happened, passing without notice except amongst those affected, i.e. the Faroe Islands. The islands accumulated too much sovereign debt, eventually getting hit by a crisis much larger in magnitude than even the worst in the ongoing European crisis.
The EU’s implementation of Basel III: A deeply flawed compromise
Morris Goldstein, 27 May 2012
By all accounts, EU member countries have for months been debating how to implement the minimum bank capital standards agreed under Basel III. Their arguments have unfolded as the EU works to complete its fourth Capital Requirements Directive and its Capital Requirements Regulation (see Veron 2012).
Three issues have been contentious:
The European debate on bank capital is not just about Europe
Nicolas Véron, 4 May 2012
The EU’s finance ministers are furiously debating the piece of banking legislation known as CRD4/CRR (the abbreviations stand for the fourth Capital Requirements Directive and the Capital Requirements Regulation).
The coming revolt against austerity
Charles Wyplosz, 2 May 2012
It is not just the election of François Hollande in France. Adopting contractionary fiscal policies in the teeth of a double-dip recession never made sense. And yet, public debts are high and markets in endemic panic. The solution must be based on a comprehensive analysis of the situation, not on arcane debates on the strength of the “confidence factor”.
Fiscal consolidation: Too much of a good thing?
John Van Reenen, 27 April 2012
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).
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.
- 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
Cadot, de Melo, 16 June 2014
CEPR Policy Research
- The buyer margins of firms' exportsCarballo, Ottaviano, Volpe
- Commodity and Equity Markets: Some Stylized Facts from a Copula ApproachDelatte, Lopez
- Ethnic Unemployment Rates and Frictional MarketsGobillon, Rupert, Wasmer
- Finance and Poverty: Evidence from IndiaAyyagari, Beck, Hoseini
- The Manipulation of Basel Risk-WeightsMariathasan, Merrouche
- The economics of Scottish independence in an interdependent worldHughes Hallett
- Making city lights shine brighterYusuf, Leipziger
- The euro in the 'currency war'Bénassy-Quéré, Martin
- The roots of shadow bankingPerotti
- What’s wrong with Europe?Baldini, Manasse
- Corporate Finance Theory Symposium19 - 20 September 2014 / Cambridge / Judge Business School, Cambridge University
- International Trade, Finance, and Macroeconomics: Research Frontiers and Challenges for Policy18 - 19 December 2014 / The Bank of England, London / The Bank of England, Centre for Macroeconomics and CEPR