Macroeconomic policy

Laurence Ball, Anusha Chari, Prachi Mishra, 14 April 2017

The inflation rate in India rose from 3.7% to 12.1% between 2001 and 2010, raising concerns that it will rise again. This column separately analyses India's core and headline inflation rates and argues that the average level of core inflation has been consistently less than that of headline inflation. Short-term volatility in prices, especially for food, has driven India’s headline inflation. Estimating a Phillips curve suggests a core inflation–output trade-off in India similar to that of advanced economies during the 1970s and 1980s.

Christopher House, Christian Proebsting, Linda Tesar, 11 April 2017

Austerity policies implemented during the Great Recession have been blamed for the slow recovery in several European countries. Using data from 29 advanced economies, this column shows that austerity policies negatively affect economic performance by reducing GDP, inflation, consumption, and investment. It also warns that efforts to reduce debt through austerity in the depths of the economic recession were counterproductive.

Domenico Lombardi, Pierre Siklos, 11 April 2017

Macroprudential policies increasingly lie at the heart of how central banks jointly manage of price and financial stability. However, consensus over best practice has yet to emerge. This column presents an improved indicator to measure individual economies’ macroprudential policy capacity. Improvements include incorporating the shadow banking sector, and distinguishing the types of institutions that wield authority. Results suggest that improvements continue to be made with respect to the development of an international financial system with improved resilience to shocks. 

The Editors, 08 April 2017

Central banks are now moving towards exiting from quantitative easing and other unconventional monetary policies. This column highlights a 2013 CEPR/ICMB report that examined the policy challenges surrounding this difficult and unprecedented task. It explores ways policymakers could handle exit and its long-run implications. This is part of the CEPR Flashbacks series that highlights the relevance of past CEPR reports to today’s challenges.

Our CEPR Flashbacks highlight past CEPR reports relevant to today’s challenges. This column highlights a report first published in 2013, which examined how the exit from unconventional monetary policies could be handled by policymakers, what the post-exit world will look like, and the long-run implications for central banks. 

The Editors, 30 March 2017

This column introduces a new series – CEPR Flashbacks – which highlights past CEPR reports that are relevant to today’s challenges. In many cases, the analysis is highly pertinent to today’s policy questions, while in others the reports provide useful context on how leading thinkers approached similar problems in the past. The first CEPR Flashback highlights a 1995 report, “Flexible Integration”, which suggested a solution to the problem that EU leaders are tackling in their current reflection on the Future of Europe.

Other Recent Articles:

Events