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Tag Archives: Economic Blogs Review

The breakdown of the covered interest rate parity condition

A textbook condition of international finance breaks down. Economic research identifies the interplay between divergent monetary policies and new financial regulation as the source of the puzzle, and generates concerns about unintended consequences for financing conditions and financial stability. The breakdown of the covered interest rate parity condition What’s at stake: a textbook condition of international finance breaks down. Economic research identifies the interplay between...

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The campaign against ‘nonsense’ output gaps

A campaign against “nonsense” consensus output gaps has been launched on social media. It has triggered responses focusing on the implications of output gaps for fiscal policy under EU rules, especially for Italy. But the debate about the reliability of output-gap estimates is more wide-ranging. The debate on the output gap is hardly new. What motivates this review is rather the social media campaign Robin Brooks (Institute of International Finance) recently launched against “nonsense”...

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The ‘seven’ ceiling: China’s yuan in trade talks

Investors and the public have been looking at the renminbi with caution after the Trump administration threatened to increase duties on countries that intervene in the markets to devalue/undervalue their currency relative to the dollar. The fear is that China could weaponise its currency following the further increase in tariffs imposed by the United States in early May. What is the likelihood of this happening and what would be the consequences for the existing tensions with the United...

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The next ECB president

On May 28th, EU heads of state and government will start the nomination process for the next ECB president. Leaving names of possible candidates aside, this review tries to isolate the arguments about what qualifications the new president should have and what challenges he or she is likely to face. On May 28th, two days after European Parliament elections have been held in all 28 member states, heads of state and government will meet in Brussels to start the nomination process for the...

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The latest European growth-rate estimates

The quarterly growth rate of the euro area in Q1 2018 was 0.4% (1.5% annualized), considerably higher than the low growth rates of the previous two quarters. This blog reviews the reaction to the release of these numbers and the discussion they have triggered about the euro area’s economic challenges. Two important announcements regarding European economic growth took place in the course of the last two weeks. First, Eurostat announced its preliminary flash estimate for real growth for...

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All eyes on the Fed

Last week the US Federal Reserve left the federal funds rate unchanged and lowered the interest rate on excess reserves. We review economists’ recent views on the monetary policy conduct and priorities of the United States’ central bank system. The Federal Open Markets Committee (FOMC) held its third meeting of 2019 last week (April 30th and May 1st). Given the very recent change in monetary policy stance, there was no great anticipation of interest rate changes. However, despite how...

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Is this blog post legal (under new EU copyright law)?

How new EU rules on using snippets from news publishers and on copyright infringement liability might affect circulation of information, revenue distribution, market power and EU business competitiveness. By: Catarina Midoes Date: April 8, 2019 Topic: European Macroeconomics & Governance On March 26th 2019, after more than two years of negotiations and 50 amendments by the European Parliament, the Copyright Directive was...

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Secular stagnation and the future of economic stabilisation

Larry Summers’ and Łukasz Rachel’s most recent study documents a secular fall in neutral real rates in advanced economies. According to the authors, this fall would be even more marked in the absence of offsetting fiscal policies. Policymaking in a world of permanently low interest rates may be hard to navigate, especially in troubled waters. We review economists’ views on the matter By: Inês Goncalves Raposo Date: April 1, 2019 Topic: European Macroeconomics & Governance...

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The American tax debate

The debate over two different proposals for tax reforms: Senator Elizabeth Warren’s plan for a tax on wealth, and Congresswoman Alexandria Ocasio-Cortez’s plan for a higher top marginal tax rate on income During a panel at Davos, Dell founder Michael Dell was asked about his opinion on the proposal of a 70% top marginal tax rate; he replied: “Name a country where that has worked. Ever.” Co-panelist Erik Brynjolfsson (MIT) names the United States, in between the 1930s and the 1960s, when...

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Brexit: Now for something completely different?

The life of Brexit. After a week of ECJ rulings, delayed votes, Theresa May’s errands across Europe and the vote of no confidence, we review the latest economists’ opinions to try to make sense of what has changed and what hasn’t. By: Inês Goncalves Raposo Date: December 17, 2018 Topic: European Macroeconomics & Governance Luxembourg, December 10th 2018: “The United Kingdom is free to unilaterally revoke the notification of...

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