Europe’s Rate Rise Signals End of Cheap-Money Era
Blackstone, Brian, Wessel, David. The European Central Bank on Thursday became the first monetary authority in a major developed economy to raise interest rates since the global financial crisis struck—a sign that the long period of extraordinarily easy credit is beginning to come to a close. In the U.S., where there is less inflation angst than […]
Quarterly report on the euro area (1/2011)
European Commission, DG Economic and Financial Affairs. The April 2011 issue of the Quarterly Report focuses on the EU’s economic policy response to the crisis since its outbreak in 2008, placing a particular emphasis on the comprehensive package of policy measures agreed by the European Council in March 2011. The Council’s decision to establish a […]
New Europe: Old problems
Bailouts will not drive the eurozone or the EU through the floor – but both will need running repairs. Yesterday, Dublin. Today, Lisbon. Portugal’s caretaker government now has to choose between going for a bridging loan, for which no fund or mechanism yet exists, or negotiating a bailout of anywhere between €70bn (£61bn) and €80bn. […]
The Danish flexicurity model in the Great Recession
Andersen,Torben, Bosch, Nicole, Deelen, Anjia & Euwals, Rob. Before the Great Recession, Denmark’s “flexicurity” model had been lauded as an example of how to achieve outstanding labour-market performance. This column takes a closer look at Denmark’s labour-market response during the recent global crisis. Although it is too early to draw ultimate conclusions, it says some challenges are already visible. […]
Global imbalances and the paradox of thrift
Corden, Max. The global imbalances are fashionably and officially perceived as a problem, especially by the US government and US economists.There have been proposals that they should be internationally regulated and, above all, reduced. These “imbalances” are national current-account surpluses and deficits offset by net capital flows between countries, including changes in foreign currency reserves. […]
How Rich Countries Became Rich and Why Poor Countries Remain Poor: The Role of Sophisticated and Well-Connected Products
Felipe, Jesus, Kumar, Utsav & Abdon, Arnelyn. In a new paper, Felipe et al. (2010) provide empirical support for the idea that countries that are unable to upgrade and diversify their exports may end up being caught in a middle-income trap. They classify 779 products according to their sophistication and connectivity to other products and use this […]