Saving Europe’s Real Hegemon
Sinn, Hans-Werner Last June, the European Commission announced its about-face on bank restructuring. The money for recapitalizing distressed banks would now come primarily from creditors, not European taxpayers, with a pecking order to specify which lenders would be repaid first. All of this is welcome, at least in principle. In practice, however, the scheme leaves […]
Sovereign debt and its restructuring framework in the euro area
Mody, Ashoka. To compensate for the inflexibility of fixed exchange rates, the euro area needs flexibility through a system of orderly debt restructuring. With virtually no room for macroeconomic manoeuvring since the crisis onset, fiscal austerity has been the main instrument for achieving reductions in public debt levels; but because austerity also weakens growth, public […]
Whose Economic Reform?
Pisani-Ferry, Jean. Together with fiscal consolidation, structural reform is the new European mantra. International organizations and European Union bodies regard such reform as a prerequisite of economic recovery, growth, and alleviation of the unemployment plague. Πηγή: www.project-syndicate.org πλήρες κείμενο
Redesigning the ECB with regional rather than national central banks
Burda, Michael. Eurozone national central banks that take a national perspective risk politicising the ECB’s monetary policy. This column argues that this is a significant risk that should be overcome with a fundamental overhaul of the Eurosystem. A central element would be to take the ‘national’ out of the EZ’s national central banks. Just as […]
Short-time work: Does it save jobs?
Balleer, Almut, Gehrke, Britta, Lechthaler, Wolfgang & Merkl, Christian. During the Great Recession, 25 of 33 OECD countries have used some version of short-time work, a form of publicly subsidised working-time reductions. This column argues that despite its popularity, knowledge of the macroeconomic effects of this measure is limited. Using Germany as a case study, it’s […]
Unemployment is the scourge, not youth unemployment per se: The misguided policy preoccupation with youth
Barslund,Mikkel Gros, Daniel. This Policy Brief argues that too much effort and political capital is being spent by the Commission and member states on being seen to be doing something quickly about youth unemployment when, in fact, the structural measures proposed will only have long-term effects. Expectations of immediate relief are running well above what […]
Much pain for small gain: difficulty of cost adjustment in the euro area
Vihriälä, Erkki, Wolff, Guntram. IMF’s latest World Economic Outlook discussed reasons for relatively stable inflation following the Great Recession. It noted that large output gaps and high unemployment have resulted in surprisingly little disinflation in advanced countries. This was attributed to more firmly anchored long-term inflation expectations as well as the reluctance of workers to accept […]
Central bank cooperation during the great recession
Papadia, Francesco. During the Great Recession, central banks went well beyond their normal operations and provided liquidity in unlimited amounts, in foreign currency and to foreign banks. Central bank cooperation took the form of a swap network, and amounted to an episode of global monetary policy. Πηγή: Bruegel πλήρες κείμενο
Lessons of a Greek Tragedy
Eichengreen, Barry. A visit to Greece leaves many vivid impressions. There are, of course, the country’s rich history, abundance of archeological sites, azure skies, and crystalline seas. But there is also the intense pressure under which Greek society is now functioning – and the extraordinary courage with which ordinary citizens are coping with economic disaster. […]
Latvia in the Eurozone: A Bet with No Upside
Mody, Ashoka. The euro does not help Latvia, but could hurt it. The Eurozone is not helped by Latvia, but Latvian entry could create new problems. The best scenario is that no one does worse than the status quo after Latvia joins the Eurozone. So why the rush for Latvia to become the 18th member […]