Lithuania changes the ECB’s voting system
Merler, Silvia. Lithuania will become the 19th member of the Euro area on the 1st of January, following Wednesday’s Council endorsement. The most important part of the story – however – is not that someone is still brave enough to join the Euro area, but that Lithuania’s accession will trigger a change in the voting […]
Economic policies pursuant to the Global Crisis: A critique
Wood, Richard. The Global Crisis triggered a series of medium-term policy changes. This column reviews the effectiveness of some of these monetary, fiscal policies, and internal devaluation policies. Policymakers anchored their strategic thinking in paradigms that became inapplicable to the new problems. An alternative set of macroeconomic policies is suggested. Πηγή: Voxeu πλήρες κείμενο
Revisiting the pain in Spain
Paul De Grauwe. There has been a stark contrast between the experiences of Spain and the UK since the Global Crisis. This column argues that although the ECB’s Outright Monetary Transactions policy has been instrumental in reducing Spanish government bond yields, it has not made the Spanish fiscal position sustainable. Although the UK has implemented […]
Lacklustre investment in the Eurozone: Is there a puzzle?
Buti, Marco, Mohl, Philipp. Investment in the Eurozone is forecast to remain below trend until 2015, with a particularly large shortfall in the periphery. Low investment reduces aggregate demand, thus lowering short-term growth, and it also hampers medium-term growth through its effect on the capital stock. This column highlights three causes of low Eurozone investment […]
Disappearing government bond spreads in the eurozone – Back to normal?
De Grauwe, Paul Yuemei Ji. Since the announcement of the Outright Monetary Transactions (OMT) programme by Mario Draghi, President of the ECB, in 2012, the government bond spreads began a strong decline. This paper finds that most of this decline is due to the positive market sentiments that the OMT programme has triggered and is not […]
Implementation of the Macroeconomic Adjustment Programmes in the Euro Area: State-of-Play
Daniel Gros, Cinzia Alcidi, Ansgar Belke, Leonor Coutinho & Alessandro Giovannini. Two of the four macroeconomic adjustment programmes – in Portugal and Ireland – can be considered a success in the sense that the initial expectations in terms of adjustment, both fiscal and external, were broadly fulfilled. A rebound based on exports has taken hold […]
Economic theories that influenced the judges of Karlsruhe
De Grauwe, Paul. The German constitutional court declared the OMT program to against EU law. This column argues that the economic logic used by the German judges was flawed – based on economic theories that have been rejected empirically. Πηγή: Voxeu πλήρες κείμενο
Tracking the causes of Eurozone external imbalances: New evidence
Jose Luis Diaz Sanchez, Aristomene Varoudakis. External imbalances within the Eurozone grew substantially between the introduction of the euro in 1999 and the global financial crisis of 2008–09. Using new empirical evidence, this column argues that imbalances in the Eurozone periphery were mainly driven by a domestic demand boom, triggered by greater financial integration, with […]
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 […]
Yes, it’s the economy, stupid, but is it demand or supply?
De Grauwe, Paul. Paul De Grauwe writes in this new CEPS Commentary that the recent and surprising conversion of François Hollande to supply-side economics completes the victory of the northern European policy-makers who believe that insufficient aggregate demand should be fought exclusively by supply-side measures. In his view, however, it is not the first time in […]