Pierluigi Bologna, Arianna Miglietta, Anatoli Segura, 29 October 2018

Proponents of contingent convertible bonds, or CoCos, argue that they are effective instruments for bank recapitalisation. Sceptics argue that they introduce too much complexity, with potentially destabilising consequences. This column addresses this dispute empirically, using the dynamics of the CoCo market in 2016. The CoCo market at the time exhibited adverse dynamics that can’t be explained by banks’ fundamentals. Though some of this instability may have been transitory, the findings imply that the market should be monitored as it develops.

Friedrich Heinemann, Stefani Weiss, 26 October 2018

The EU’s Common Agricultural Policy for the decade ahead is beginning to take shape. This column argues that, as it stands, the policy fails to ensure public goods provision for the EU at large, and the lack of clarity on its payment terms are a concession to pressure from farmers’ lobbies. Without significant changes in the final stages of negotiation, the CAP could become an enormous waste of resources while providing little or no ‘European added value’.

Katre Eljas-Taal, Neil Kay, Lucas Porsch, Katarina Svatikova, 12 October 2018

Collaborative platforms have quickly penetrated several services sectors. Statistics on the development of the collaborative economy are essential for appropriate policy responses but there are few available. This column presents a simple methodology for estimating the economic size of the collaborative economy, which is also relevant for the platform economy.

Ronald Davies, Joseph Francois, 01 October 2018

With increasing frustration over the situation as ‘Brexit Day’ approaches, some political pundits are suggesting that an Irish exit from the EU would benefit Ireland. This column assesses the macroeconomic impact of a range of scenarios and argues that while any version of Brexit, with or without Irexit, worsens the Irish economic situation relative to the status quo, economically speaking the best option for Ireland is to stay within the fold of the EU while hoping for and working towards the best in terms of post-Brexit UK economic integration with Europe.

Lucia Alessi, Peter Benczur, Francesca Campolongo, Jessica Cariboni, Anna Rita Manca, Balint Menyhert, Andrea Pagano, 26 September 2018

Over recent decades, scholars and policymakers have been exploring how to make economies more resilient to potential shocks. This column investigates which EU members showed resilience during the Global Crisis and attempts to identify characteristics associated with resilience. The results reveal a lot of heterogeneity amongst countries, and those that are more resilient in the short run are not necessarily those with superior recoveries down the line. Further analyses show that social expenditures, political stability, and competitive wages are important for impact, medium-run, and ‘bounce forward’ resilience, respectively. 

Vincent Bouvatier, Gunther Capelle-Blancard, Anne-Laure Delatte, 11 September 2018

Tax havens are estimated to concentrate 8% of global private financial wealth, reducing annual global tax revenues by about $200 billion. This column uses new country-by-country regulatory data on the foreign commercial presence of EU banks and compares it against gravity model predictions to examine the contribution of EU banks to tax evasion. It finds that bank activity in tax havens is three times larger than what is predicted by the gravity model, and that British and German banks are particularly present in tax havens. 

Bert Smid, Beau Soederhuizen, Rutger Teulings, 10 September 2018

The transition to a European banking union is not straightforward. A key issue is how to prioritise risk sharing and risk reduction. This column examines three possible approaches, describing the respective transition scenarios and analysing the consequences for banks during the transition phase. None of the scenarios is optimal for all countries, but waiting too long may lead to solutions needing to be found under the pressure of a new crisis.

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.

Chad Bown, Eva (Yiwen) Zhang, 31 July 2018

Dennis Novy, 27 July 2018

When President Trump recently spoke of his hope for "a great bilateral trade agreement” with the UK after Brexit, what did he really mean? Dennis Novy of the University of Warwick describes what these political good intentions may look like in reality, the problems that both sides will have to solve to agree a UK-US deal, and the factors that might derail any agreement.

Yuriy Gorodnichenko, Debora Revoltella, Jan Svejnar, Christoph Weiss, 25 July 2018

Many barriers keep resources from flowing to the most efficient firms in the EU. This column uses firm-level data from all EU countries to explore how the dispersion of resources affects macroeconomic performance. Harmonising the business environment – and thus easing the flow of resources – across countries and industries could increase aggregate EU growth by 18%. The findings also demonstrate how firm-level characteristics can help us understand distortions in the allocation of resources across firms. 

Simon Wren-Lewis, 20 July 2018

Moreno Bertoldi, Paolo Pesenti, Hélène Rey, Petr Wagner, 20 July 2018

Ten years after the global crisis, transatlantic relationships are at a crossroads. This column summarises a conference jointly organised by the New York Fed, the European Commission, and CEPR at which the participants discussed the strength of current growth prospects and the likelihood of inflation remaining subdued in advanced economies, and whether the current regulatory and policy frameworks are well suited to supporting financial stability and growth. One conclusion was while an escalation in trade tensions between the US and EU would have significant economic consequences on both sides of the Atlantic, this is not a foregone conclusion and there is room to uphold and strengthen the transatlantic relationship.

Antoine Levy, 22 July 2018

The euro improved the credibility of monetary policy for many member states, but the downsides of not having monetary autonomy became painfully apparent during the European debt crisis. This column proposes ‘targeted inflation targeting’ as a way to improve stabilisation mechanisms in the euro area, without losing the benefits of integration. The ECB would maintain a rules-based approach that targets countries in a weaker macroeconomic position more aggressively.

Marco Buti, Mirco Tomasi, 20 July 2018

International economic cooperation is in crisis. The global economy faces fragmentation across institutional, economic, and social dimensions. This column argues that the task of the G20 is to revamp international economic cooperation and to promote a multilateral approach that addresses the key concerns of our citizens starting with greater inclusiveness and fairness. Europe can play a leading role in a world in search of a new anchor. 

Simon Wren-Lewis, 05 July 2018

Olivier Blanchard, Jacob Kirkegaard, 03 July 2018

Simon Wren-Lewis, 29 June 2018

Stephen Byrne, Jonathan Rice, 19 June 2018

While the effect of Brexit on trade between the UK and the remaining EU member states has received considerable attention, to date little work has considered the issue of non-tariff barriers. This column explores how increased documentary compliance and border delays will affect EU members’ exports to the UK. Time-sensitive goods are found to be most at risk of suffering from increases in non-tariff barriers. Based on current trade composition, Latvia, Ireland, and Denmark are the trading partners that will be most affected.

Pages

Events

CEPR Policy Research