Blueprint
‘Manufacturing Europe’s future’ means getting the policies right for firms to grow and prosper. It is not about picking one sector over another, but primarily about setting the right framework conditions for growth, innovation and jobs.
Policy Contribution
This Policy Contribution was prepared for the European Parliament's 'Economic Dialogue with the President of the Eurogroup' Jeroen Djisselbloem'. The July 2013 European Council recommendations to the euro area recognise a number of fiscal and macrostructural challenges, but do not fully exploit the options made possible by the European economic governance framework.
Blog Post
Inflation in the euro area remains low. Eurostat’s most recent figures show that inflation in the monetary union remained unchanged at 1.6 % in July compared to the same month a year ago. This post analyses price developments in a bit more detail to assess underlying inflation pressures. Feasibility of relative price adjustment in the monetary union is also considered.
Blog Post
Europe failed to properly address the consequences of the Greek debt restructuring. The crisis came back with a vengeance when the Cypriot crisis eventually came to the fore
Blog Post
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 nominal wage cuts. The positive implication is that efforts to stimulate the economy should not result in rapidly rising inflation even if output gaps are overestimated provided that long-term expectations remain anchored. However, the finding also means that intra-euro area price adjustment is more challenging, which is the focus of this blog entry.
Blog Post
We documented the initial deposit flight from Cypriot banks after the country’s rescue package. The central bank of Cyprus released today data on deposits in Cypriot banks by non-banks at the end of May. These declined by 1.4 bn EUR from a month earlier, i.e. by 2.5 %. This brings the cumulated decline February–May to 17.1 %. In this post we examine the evolution of the balance sheet of Cypriot banks a bit more thoroughly, by inspecting also the evolution of assets and other liabilities than deposits. We also attempt to clear some of the issues with Cypriot data.
Blog Post
This post is an update on the current account developments in Southern Europe and the composition of corresponding financial flows.
Blog Post
The Central Bank of Cyprus released data today on the amount of deposits in Cypriot banks at the end of March. The original rescue plan, involving haircuts to uninsured deposits, was announced on the 16th of March and the final modified agreement on the 25th of March. The data is therefore an early indicator of: (i) the degree of rush by depositors to withdraw their money; (ii) the efficiency of Cypriot capital controls.
Blog Post
We documented early signs of improved market sentiment towards struggling euro members in this post at the end of January. Since then, however, European economic data has been mostly disappointing.
Blog Post
Worries about Cyprus at first decreased with the second agreement between the Cypriot government and euro area partners. Controversially, however,capital controls have been used as a way to prevent an outright bank run. This blog briefly reviews the literature on bank runs and comments on different ways to prevent them.
Blog Post
The debate about appropriate fiscal policy has been fluctuating since the onset of the financial crisis.
Blog Post
Private capital is returning to the distressed Eurozone countries and sovereign bonds. 2012 might be remembered as the year in which two “ends of the world” were luckily averted: one, thanks to the wrong intuition of a Mayan forecaster; the other one, thanks to the right intuition of a European central banker.