Europe's nations and regions

Maria Ferreira, 21 September 2018

Despite a considerable premium on equity compared to risk-free assets, many households do not own any financial investments. Personal risk preferences play a crucial role in understanding this economic behaviour. This column analyses financial risk attitudes across 15 countries and identifies relevant factors that affect the willingness to take risky investment decisions. The results reveal a significant heterogeneous attitude of risk-aversion in all countries and suggest that standard portfolio-investment theory does not always hold. 

Shlomo Weber, 14 September 2018

English is the most widely-spoken language in Europe, but after Brexit it will cease to be an official language of the EU. Tim Phillips speaks to Shlomo Weber about which languages will become more important as a result, and the long-term implications for the English language — and the people who speak it. 

Yann Algan, Elizabeth Beasley, Daniel Cohen , Martial Foucault, 07 September 2018

The 2017 French presidential election is but one example of the move away from the traditional left-right political axis. This column argues that subjective variables are key to understanding this shift. Votes on the traditional left-right axis are correlated with views on redistribution and predicted by socioeconomic variables such as income and social status. Votes in the 2017 election in France, however, appear to have been driven by individual and subjective variables, with low well-being associated with ‘anti-system’ opinions (on the left or the right) and low interpersonal trust associated with right-wing populism.

Christian Bayer, Chi Hyun Kim, Alexander Kriwoluzky, 06 September 2018

Investors fret that Italy may exit the euro. One reason to worry is redenomination risk, driven by the prospect of a country allowing a new currency to depreciate against the euro. This column compares two types of Italian bond yield curves to estimate such risk, and finds that the yield premium due to it peaked at 7% during the sovereign debt crisis. Redenomination risk also affects interest rates in strong economies, which implies a redistribution between savers and borrowers throughout the euro area.

Victor Ginsburgh, Juan Moreno-Ternero, Shlomo Weber, 26 August 2018

After Brexit, English can no longer retain its status as one of the EU's official or working languages. This column uses data on languages spoken in the EU to show that post-Brexit, German and French would become dominant. Efforts to preserve English as an official language of EU institutions, which would require a unanimous vote among members, are unlikely to succeed. This may be problematic for certain European countries in which English is a more widely spoken second language than German or French.

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