European banks have not recovered from the Global Crisis, in part due to heavy provisions for non-performing loans. This column argues that a comprehensive approach to the issue in Europe could address market inefficiencies and reduce bad loans to bearable levels. The establishment of a European scheme to securitise non-performing loans should form one of the next steps towards recovery.
A majority of UK-based macroeconomists welcome the government’s new industrial strategy, but doubt that the government can deliver. This column, which presents the results of the latest Centre for Macroeconomics and CEPR survey, shows a large majority of economist think that the UK needs a new regional strategy to tackle inequality across different parts of the country.
The revival of nationalism in western Europe, which began in the 1990s, has been associated with increasing support for radical right parties. This column uses trade and election data to show that the radical right gets its biggest electoral boost in regions most exposed to Chinese exports. Within these regions communities vote homogenously, whether individuals work in affected industries or not.
There is growing concern that dominant companies use patents strategically to keep competitors from entering their market. This column uses the landmark 1956 Consent Decree against Bell Labs to explore whether antitrust enforcement is an effective remedy to the problem. Results show that patents can indeed be used as an entry barrier for start-up firms, and that the compulsory licensing of patents can foster market entry and innovation. However, compulsory licensing is found to be ineffective in markets where dominant firms have other means of market foreclosure.
The IMF has just released its self-evaluation of its Greek lending, in which it admits to many mistakes. This column and argues that the report misses one important error – reliance on the Debt Sustainability Analysis – but notes that the IMF’s candour should be a model for the other participants in the lending, namely, the European Commission and the ECB.
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