Club Med and the Sun Belt: Lessons from adjustment within a monetary union
Dadush, Uri, Wyne, Zaahira, Ali, Shimelse. The US and the Eurozone are slowly recovering after the bursting of their huge housing bubbles. Yet the hardest-hit states in the US have adjusted more rapidly than the most troubled European economies. This column examines differences between the US and Eurozone monetary unions that can help explain why. Πηγή: Voxeu […]
Tradable sectors in Eurozone periphery countries did not underperform in the 2000s
Gaulier, Guillaume, Taglioni, Daria & Vicard, Vincent. Some view uncompetitiveness in the Eurozone’s periphery as the fundamental cause of the region’s crisis. This column presents evidence that rising unit labour costs in the periphery were not a cause but rather a symptom of the local demand shocks triggered by large capital inflows in the 2000s. Πηγή: […]
Austerity is unavoidable after a bout of profligacy
Gros, Daniel. Despite the EZ doom and gloom discussion, the US and EZ are at roughly the same point in their recovery from the global crisis. This column argues that the ‘austerity kills’ narrative of Krugman and Layard misses the basic point. Public debt ratios without retrenchment would become unsustainable. The fact that austerity is […]
Central Banks in Times of Crisis: The FED vs. the ECB
Gros, Daniel, Alcidi, Cinzia & Giovannini, Alessandro. Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first ‘stage’ of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to […]
EU banking union disunites German economists
Birchler, Urs Bütler,Monika. Plans for an EZ banking union have been subjected to ‘dueling open letters’ by German-speaking economists. This column, by two Swiss-based economists, views the letters as closer than one thinks. The difference rests, not on economics, but on a judgement – will the the EU Summit’s promises be fulfilled, or is this […]
Europe’s banking union: Possible next steps on a bumpy path
Véron, Nicolas. For many, Europe’s latest summit on 29 June effectively promised a banking union. This column praises the move but argues that this remains just a bare bones promise and the details are yet to be fleshed out. In the short term it calls for a temporary task force, akin to that used by […]
Paths to Eurobonds
Stijn, Claessens, Ashoka, Mody & Shahin, Vallée. This paper discusses proposals for common euro area sovereign securities. Such instruments can potentially serve two functions: in the short-term, stabilize financial markets and banks and, in the medium-term, help improve the euro area economic governance framework through enhanced fiscal discipline and risk-sharing. Πηγή: IMF πλήρες κείμενο
The Euro’s Latest Reprieve
Stiglitz, Joseph. Like an inmate on death row, the euro has received another last-minute stay of execution. It will survive a little longer. The markets are celebrating, as they have after each of the four previous “euro crisis” summits – until they come to understand that the fundamental problems have yet to be addressed. Πηγή: […]
The creation of euro area financial safety nets
Bijlsma, Michael, Vallée, Shahin. The financial crisis has exposed the need to devise stronger and broader international and regional safety nets in order to deal with economic and financial shocks and allow for countries to adjust. Πηγή: Bruegel πλήρες κείμενο
Europe’s Great Illusion
Krugman, Paul. Over the past few months I’ve read a number of optimistic assessments of the prospects for Europe. Oddly, however, none of these assessments argue that Europe’s German-dictated formula of redemption through suffering has any chance of working. Instead, the case for optimism is that failure — in particular, a breakup of the euro […]