Sovereign debt, bailouts and contagion in the Eurozone

Michal Kobielarz, Burak Uras & Sylvester Eijffinger. The Eurozone Crisis has been characterised by a sharp rise in sovereign interest rates in peripheral countries. The re-emergence of spreads between peripheral and core Eurozone countries at the start of the Greek crisis came after a decade of homogeneous interest rates in the monetary union. This column […]

How to reduce the Greek debt burden?

Darvas, Zsolt, Hüttl, Pia. The Greek debt reduction issue has been put back on the table as the 25 January 2015 parliamentary snap elections are approaching. Already in November 2012, Eurogroup conclusions stated that “Member states will consider further measures and assistance … if necessary, for achieving a further credible and sustainable reduction of Greek debt-to-GDP ratio, when […]

Structural Reforms Will Not Mitigate The Risk Of Deflation In Europe

Theodoropoulou, Sotiria. In a speech delivered at the Central Bank of Latvia on October 17th, Benoit Coeuré, member of the executive board of the ECB and apparently one of the currently few close confidants of Mario Draghi, argued that speeding up the pace of structural reforms in the Eurozone could be key to averting the […]

How to climb a mountain with both hands tied

Jean Pisani-Ferry. A triple-dip recession in the Eurozone is now a distinct possibility. This column argues that additional monetary stimulus is unlikely to be effective, that the scope for further fiscal stimulus is limited, and that some structural reforms may actually hurt growth in the short run by adding to disinflationary pressures in a liquidity […]

Monetary policy and long-term trends

Charles A.E. Goodhart, Philipp Erfurth. There has been a long-term downward trend in labour’s share of national income, depressing both demand and inflation, and thus prompting ever more expansionary monetary policies. This column argues that, while understandable in a short-term business cycle context, this has exacerbated longer-term trends, increasing inequality and financial distortions. Perhaps the […]

Is the ECB doing QE?

Charles Wyplosz. Last week, the ECB announced that it would begin purchasing securities backed by bank lending to households and firms. Whereas markets and the media have generally greeted this announcement with enthusiasm, this column identifies reasons for caution. Other central banks’ quantitative easing programmes have involved purchasing fixed amounts of securities according to a […]

Investing for Europe’s Future

Mateusz, Szczurek. The ‘lost decade’ is not a scenario for the EU, it’s the baseline forecast. In this column, Polish Finance Minister Mateusz Szczurek calls for an EU-wide public investment programme of 5.5% of GDP to overcome the constraints behind Europe’s ‘secular stagnation’. He calculates that €700 billion of capital expenditures could close the output […]

How to jumpstart the Eurozone economy

Giavazzi, Francesco, Tabellini, Guido. The stagnating Eurozone economy requires policy action. This column argues that EZ leaders should agree a coordinated 5% tax cut, extension of budget deficit targets by 3 or 4 years, and issuance of long-term public debt to be purchased by the ECB without sterilisation. Πηγή: Voxeu πλήρες κείμενο

Νίκος Κουτσιαράς: Μακροοικονομική θεωρία και πολιτική (επιστήμη)

Η εξηγητική ισχύς και προγνωστική δυνατότητα της  μακροοικονομικής θεωρίας είναι αντικειμενικώς περιορισμένη και η διαμόρφωση της μακροοικονομικής πολιτικής μοιραίως εξαρτάται, επίσης, από (αμιγώς) πολιτικούς παράγοντες – που μελετώνται από την πολιτική θεωρία και αναγνωρίζονται στην πολιτική οικονομία. Η πρόσφατη κρίση θέτει υπό πολύ σοβαρή αμφισβήτηση θεωρητικά υποδείγματα, αλλά και ιδεολογικές θέσεις, που υποστηρίζουν ότι η […]

Framing Banking Union in the Euro Area: Some empirical evidence

Diego Valiante. Evidence shows that financial integration in the euro area is retrenching at a quicker pace than outside the union. Home bias persists: Governments compete on funding costs by supporting ‘their’ banks with massive state aids, which distorts the playing field and feeds the risk-aversion loop. This situation intensifies friction in credit markets, thus […]