EU policies

Marika Cioffi, Marzia Romanelli, Pietro Rizza, Pietro Tommasino, 19 April 2019

During the euro are sovereign crisis we saw contagion and increased interdependence, with the risk of systemic crises. This column sets out a plan to create a European debt redemption fund that pools a portion of sovereign debt. The fund could also become the basis for further euro area reform.

Dirk Schoenmaker, 05 April 2019

We're not short of policies intended to save us from catastrophic climate change, but should monetary policy be part of this effort? Dirk Schoenmaker of Erasmus University thinks so, and he tells Tim Phillips how it would work in practice.

Ellen Ryan, Karl Whelan, 05 April 2019

The EU’s asset purchase programme saw its central banks’ reserve balances increase to unprecedent levels. This column analyses the response of banks in the euro area to this expansion in system-wide reserves, in particular whether they absorbed the excess liquidity or tried to push it off their balance sheets. The findings suggest that banks dealt with the increased reserves with the purchase of debt securities or paying down funding sources rather than lending to the real economy.

Debora Revoltella, Philipp-Bastian Brutscher, Patricia Wruuck, 05 April 2019

Spending on education underpins the formation of human capital. But intra-EU labour mobility means that returns to such spending often accrue somewhere other than where the investment takes place, which can lead to sub-optimal levels of investment in countries that are subject to persistent outward migration. This column advocates for more intra-EU coordination on investment in education and proposes a novel mechanism for fostering more investment in human capital across the EU.

Adam Elbourne, Kan Ji, Bert Smid, 13 March 2019

Previous research has shown that changes to the size of the ECB’s balance sheet were followed by meaningful changes in macroeconomic aggregates. This column argues that the econometric technique these studies employed does not provide reliable estimates. Impulse responses to purported balance sheet shocks are statistically indistinguishable from those from nonsensical identification schemes. The effectiveness of the ECB’s balance sheet policies is therefore still unproven.

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