Europe's nations and regions

Steffen Juranek, Jörg Paetzold, Hannes Winner, Floris Zoutman, 12 September 2020

Sweden attracted international attention for not imposing a strict lockdown after the outbreak of COVID-19. This column analyses the labour market effects of this strategy by comparing unemployment and furlough spells in Sweden to three of its Nordic neighbours. The evidence suggests that the labour markets of all countries were severely hit by the pandemic, but Sweden performed slightly better than its neighbours. 

Gabriel Felbermayr, Jasmin Gröschl, Inga Heiland, 06 September 2020

Rising anti-European sentiments over the past decade have prompted economists to assess the economic consequences of undoing Europe. Focusing on trade, this column uses a state-of-the-art sector-level gravity model to estimate the cost savings achieved through each individual step of integration and then simulate the economic consequences of reversing those steps. The results suggest that if all steps were to be reversed, EU manufacturing exports would drop by 26% and services exports by 12%. A complete breakdown of the EU would also generate significant real consumption losses for all EU members, with small open economies and younger and poorer EU members from central and Eastern Europe having the most to lose.

Florian Eckert, Heiner Mikosch, Markus Stotz, 31 August 2020

The corona crisis has hit the Swiss economy hard, with survey results showing that corporate profits and demand expectations collapsed and uncertainty about future business prospects has risen sharply. This column uses unique company bankruptcy data for Switzerland to assess the current bankruptcy trend using the concept of excess mortality. The corona crisis is not causing a wave of bankruptcies for the time being, but it is still too early to give the all-clear.

Roel Beetsma, Brian Burgoon, Francesco Nicoli, Anniek de Ruijter, Frank Vandenbroucke, 21 August 2020

Building a large and durable consensus for mutual assistance policies in the EU is challenging. Even in times of crisis, member states express different preferences, and policies must reckon with democratic politics. This column presents evidence from a randomised survey to assess support for various EU budgetary assistance packages across five member states. A majority of packages are supported in all countries, although individual design features have significant effects on public approval. Importantly, it is possible to design packages such that they obtain majority support across all sampled countries, a key condition for success with policies of this kind.

Pilar Nogues-Marco, Alfonso Herranz-Loncán, Nektarios Aslanidis, 13 August 2020

The adoption of the euro, for all its flaws, constituted a giant step in the process of full integration between the European economies. It also reproduced at a larger scale the dynamics of monetary unification that took place during the 19thcentury. This column presents a historical study of Spain, evaluating the changes in the internal money market. The analysis suggests that transaction costs undertook a sustained decline over the 19th century. By contrast, the efficiency of the market did not improve before the 1880s, perhaps due to a shift in monetary leadership changes in national economic geography.

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