Europe’s Populists at the Gate
Eichengreen, Barry. Is Europe’s crisis over? Investors, policy analysts, and even officials are quietly beginning to suggest that this might be the case. The euro has strengthened by nearly 10% against the dollar since European Central Bank President Mario Draghi vowed on July 26 to do “whatever it takes” to hold the currency together. Πηγή: […]
The Greek debt trap: an escape plan
Darvas, Zsolt. Without corrective measures, Greek public debt will exceed 190 percent of GDP, instead of peaking at the anyway too-high target ratio of 167 percent of GDP of the March 2012 financial assistance programme. The rise is largely due to a negative feedback loop between high public debt and the collapse in GDP, and […]
Don’t expect too much from EZ fiscal union – and complete the unfinished integration of European capital markets!
Hoffmann, Mathias. How do members of existing monetary unions share risk? Drawing on a decade of research, this column argues that fiscal transfers in fact make a limited contribution to economic coherence. In the context of Europe’s current crisis, the evidence suggests that unfinished capital market integration must be completed if we wish to see […]
The Eurozone breakup debate: Uncertainty still reigns
Nordvig, Jens. Conversations about the breakup of the Eurozone are changing. This column argues that an ‘avoid breakup at all costs’ dogmatism may not be a prudent view. Getting good data may well be difficult, but any arguments about the cost of a Eurozone breakup must be compared to the ongoing cost of the status […]
Crisis and public support for the euro
Roth, Felix, Jonung, Lars & Nowak-Lehmann, Felicitas. The Eurozone crisis has meant slow growth, rising unemployment, and social unrest. This column gauges the impact of all this on European citizens‘ opinions about the euro and EU institutions. Using Eurobarometer surveys, the authors find that, within the Eurozone, the crisis has only marginally lowered support for the […]
Self-defeating austerity?
Holland, Dawn, Portes, Jonathan. EU governments have individually embraced severe austerity programmes in an effort to avoid becoming the next Portugal. This column presents results from the National Institute Global Econometric Model suggesting that the individually rationale polices are leading to collective folly. Keynes’ ‘paradox of thrift’ is in full swing since EU nations continue to […]
An Optimistic Case for the Euro
Feldstein, Martin. The prospects for the euro and the eurozone remain uncertain. But recent events at the European Central Bank, in Germany, and in global financial markets, make it worthwhile to consider a favorable scenario for the common currency’s future. Πηγή: Project Syndicate πλήρες κείμενο
External Imbalances in the Euro Area
Chen, Ruo, Milesi-Ferretti, Gian-Maria & Tressel, Thierry. The paper examines the extent to which current account imbalances of euro area countries are related to intra-euro area factors and to external trade shocks. Πηγή: IMF πλήρες κείμενο
The known unknowns and the unknown unknowns of the EMU
Pisani-Ferry, Jean. Extensive prior research on the economics of European monetary union highlighted some potential risks (the known unknowns) but overlooked others (the unknown unknowns). Asymmetries among participating countries, the potentially destabilising character of a one-size-fits all monetary policy, the weakness of adjustment mechanisms, the lack of incentives for fiscal discipline, the possibility of sovereign […]
Europe’s Path to Disunity
Sinn, Hans-Werner. The motto of the United States of America is: “E pluribus unum” (Out of many, one). The European Union’s motto is “In varietate concordia,” which is officially translated as “United in diversity.” It is difficult to express the differences between the US and the European model any more clearly than this. The US […]