Documents Gros, Daniel 55 results

"After almost four decades of price stability, inflation has recently approached historical highs. Initially driven by global energy and food price increases, the magnitude of the surge in inflation caught central banks and markets by surprise. Price pressures are now increasingly broadening to housing and other services, amplified by wages adjustments. Despite monetary policy tightening, inflation upside risks are large. How can central banks restore control – and with it their own credibility? With the economy weakening and the risk of recession rising, how far should monetary policy tightening go? Featuring contributions from participants in the CEPS 2023 Ideas Lab session on inflation, this Forum examines the options for central banks, the obstacles in their paths and the best course of action."

"Most of Southern Europe is only gradually emerging from the devastating effects of the eurozone crisis, with unemployment receding only gradually and a country as big as Italy seemingly stuck in a growth rate below one per cent even as risk premia have fallen dramatically. But Europe is more than a collection of special cases. There is a broader trend, which affects all countries: growth is falling and certainly falling far short of expectations. The recipe almost universally recommended is "structural reforms". But this is a recipe that has been tried intensively in recent decades, and it has failed."

"Adjustment to an external imbalance is more difficult within a monetary union if wages are sticky. Periods of high unemployment are usually necessary to achieve the required real depreciation (internal devaluation). Gradual adjustment is usually recommended to distribute the output and employment cost over time. This paper takes into account that gradual adjustment also has a cost in terms of higher current account deficits and thus a higher debt, and ultimately higher debt-service costs. We calculate the optimal path/speed of price and wage adjustment in terms of deeper parameters like the slope of the Phillips curve, the degree of openness, etc. Gradual adjustment is not always optimal."

"Fifty years ago, the first issue of Intereconomics was published. In honour of this anniversary, many top European and international economists have contributed papers to this Forum, which looks back on five decades of European integration – from the early days of the European Economic Community to the lingering effects of the recent financial crisis. The contributions also look ahead to what the future holds for the European Union, covering issues as diverse as global trade, the future of the euro, reviving economic growth, the impact of demography and international relations."

"The key problem afflicting the eurozone today seems clear: the periphery experienced a large loss of competitiveness during the boom years. In order for these economies to recover, they must restore their competitiveness, ideally by increasing productivity. This contribution shows, however, that the story line is not that straightforward. The drivers of competitiveness might have been more macro than micro in nature. The relationship between productivity and competitiveness is sometimes the opposite of what one would expect; and the link between competitiveness and exports is also much weaker than generally believed."

"The Swiss National Bank's January 2015 decision to abandon the Swiss franc's peg to the euro led to short-term chaos in exchange markets and had a dampening effect on the Swiss economy. Some economists suggested Switzerland was poised to enter a sustained period of stagnation à la Japan. The decision also reignited policy debate on the benefi ts and drawbacks to central bank intervention in currency markets. While such intervention can be justifi ed in certain situations, such as if the market is producing the “wrong rate”? it can also impose significant economic costs. The ECB's recently implemented quantitative easing programme has been regarded by many as a thinly disguised attempt to weaken the euro in order to improve the eurozone's competitiveness. However, the euro's recent weakening began well before the ECB announced its programme; moreover, previous rounds of quantitative easing by other central banks have had minimal impact on exchange rates.Keith Pilbeam, City University London, UK."

"This study is a contribution to the debate around the creation of an unemployment insurance scheme for the EU/euro area by proposing an alternative mechanism to the Europeanisation of national insurance schemes. The authors make the case for a reinsurance mechanism and show that such a system delivers, for a small average contribution, large shock-absorption capacities. At the same time, due to a threshold issue, it is not suitable for EU-level absorption of small national shocks. It is rather meant to deliver a large punch once activated, which should occur only in case of MAJOR events for the labour market. Had such a scheme been in place in the EU during the period 2000-2012, it would have been triggered 40 times."

"Vigorous debate over the effectiveness of the fiscal adjustment programmes for the crisis-stricken countries in the eurozone has grown quite polarised. In this Forum, several experts use analytical, evidence-based approaches to gauge the effectiveness of these programmes. The role played by the estimates of the fiscal multipliers that the Commission, IMF and ECB used to structure the adjustment programmes is crucial to this debate. If these multipliers were underestimated, as the IMF itself claims, then the negative impact of the fiscal restructuring on already fragile economies would also have been underestimated. Several authors examine the available evidence to determine whether the adjustments programmes were flawed from the outset. Another contribution analyses the effectiveness of structural reforms when monetary policy rates are near the zero lower bound. A final paper uses a case study of Ireland's recovery thus far to examine the actual effects that the programmes have had on the crisis-stricken countries' economies."

"With disparities in national unemployment rates reaching record levels, the debate on fiscal stabilisers in Europe has gained new momentum. Can a European unemployment insurance scheme help to absorb asymmetric shocks and bring about the desired level of macroeconomic stabilisation? What should such an unemployment benefit system look like? The contributions to this Forum explore the benefits expected from a European unemployment insurance scheme and discuss the difficulties in establishing such a policy."

"This groundbreaking study concentrates on a set of critical economic factors that will shape future economic growth at the global level and offers a description of the possible evolution of their reach and scope. Our goal in pursuing this research is not to make precise predictions about growth rates or the size of individual economies, but to provide a guide for EU policy-makers by presenting an assessment of the possible implications of such trends for the global economy and the policy challenges they raise for Europe.

In an attempt to respond to this need, this study concentrates on a set of critical economic factors that will shape future economic growth at the global level and offers a description of the possible evolution of their reach and scope, which often go beyond the purely economic dimension. Our ultimate goal is to provide a guide for policy-makers by presenting an assessment of the possible implications of such trends for the global economy and the policy challenges they raise for Europe."