Marco Buti, Servaas Deroose, José Leandro, Gabriele Giudice, 13 July 2017

Despite much being done to strengthen the Economic and Monetary Union, it remains incomplete and this is one of the main reasons for the Eurozone's lacklustre economic performance in the recent years. While there are still diverging views on how to "cross the river", there is also a political and economic window of opportunity to complete the EMU architecture. This column discusses the ideas presented in a new European Commission Reflection Paper aimed at relaunching the debate on how to move forward, with a focus on bridging the differences between the member states that stress responsibility and risk reduction and those calling for solidarity and risk sharing.

Tessa Bold, Tobias Broer, 16 February 2017

The substantial literature examining risk-sharing practices in rural villages in developing countries has typically taken the social institutions in these communities as given. Using data from India, this column challenges this assumption by showing how the costs and benefits of risk-sharing arrangements can shape these social institutions. The results suggest that the size and nature of these risk-sharing groups may evolve over time as their environment changes. Public policy to reduce consumption fluctuations can be counterproductive in the standard model because of a strong crowding-out effect.

Sylvester Eijffinger, 31 August 2016

The ECB is under fire from all sides for its inability to stimulate Europe's economies. This column puts the case for an informal European ‘praesidium’ within the Eurogroup to coordinate wider stimulus and reform measures. This will inevitably lead to the appointment of a European finance minister – the Eurozone's equivalent of Alexander Hamilton, the first Treasury Secretary in the history of the US.

Kristin Forbes, 16 May 2016

Current accounts deficits are driven by different variables, with a trade deficit being a major component. In this video, Kristin Forbes outlines a model to understand when deficits are worrying. When countries run current account deficits, we need to go beyond trade deficits and focus on financial channels and vulnerabilities. Deficits can be risky, but can also be risk-sharing. This video was recorded in March 2016 during the Royal Economic Society’s Annual Conference held at the University of Sussex.

Stefano Micossi, 07 September 2015

The sovereign debt and banking crises of 2010-12 have led to significant changes in the institutions of the Eurozone. The credibility of common policies regarding budgetary discipline and economic convergence remains weak. This chapter proposes that the way forward is to gradually bring common economic policies under the oversight of the European Parliament and to strengthen the role of the Commission. The picture must be completed with getting national parliaments more involved in the European policy process. The present state of the Eurozone could be seen as a sort of political equilibrium, likely to be economically unstable.

Margherita Comola, Marcel Fafchamps, 04 November 2014

How should researchers investigate the true role of people’s self-reported social links in getting a job, getting a favour or simply getting information? This column introduces a framework to estimate the process by which people’s self-reported social links are formed. The authors show that different link formation rules predict the different network structures seen in data from a risk-sharing survey in a Tanzanian village and the diffusion of agricultural knowledge in the Indian state of Maharashtra.

Mathias Hoffmann, Bent Sørensen, 09 November 2012

How do members of existing monetary unions share risk? Drawing on a decade of research, this column argues that fiscal transfers in fact make a limited contribution to economic coherence. In the context of Europe’s current crisis, the evidence suggests that unfinished capital market integration must be completed if we wish to see adequate and effective risk sharing.

Sebnem Kalemli-Ozcan, Bent Sørensen, 23 May 2012

News reports today are full of negative stories on the Eurozone. This column presents evidence of a much-overlooked benefit. The common currency has led to increased financial integration and in turn increased risk sharing, which helps to significantly reduce output shocks. Those arguing for a break up of the Eurozone should take note.

Torben M Andersen, 27 September 2010

Springing from the debate over the Danish flexicurity system, the author of CEPR DP8025 outlines a model in which incentive effects of tax-financed unemployment benefits are balanced by direct and indirect insurance benefits. Such benefits may increase labour market flexibility by making job searches less risky for workers.

Robert Flood, Akito Matsumoto, Nancy Marion, 12 January 2010

Financial globalisation makes it easier for individuals to trade financial assets, and that should help them diversify against country-specific risks. But empirical support for improved international risk sharing is limited. This column says that there is evidence of improved international risk sharing, and it comes mostly from the convergence in rates of consumption growth among countries.