Marcin Bielecki, Michał Brzoza-Brzezina, Marcin Kolasa, Krzysztof Makarski, 18 September 2019

The boom-bust cycle in the euro area periphery has almost toppled the euro. This column suggests that region-specific macroprudential policy could have substantially smoothed the credit cycle in the periphery and reduced the build-up of external imbalances. In contrast, common monetary policy could have stabilised output in both the periphery and the core slightly better, but it would have been incapable of significantly influencing either housing markets or the periphery’s trade balance. The column also offers policy guidelines in case internal imbalances should arise again in the euro area. 

Stephen Cecchetti, Kim Schoenholtz, 09 July 2018

Athanasios Orphanides, 09 March 2018

Since the beginning of the euro area crisis, euro area governments have experienced greater fiscal stress than governments of advanced economies outside the euro area with comparable or weaker fiscal fundamentals. This column, taken from a recent VoxEU eBook, asks what the source of this fragility has been, how it relates to the role of the ECB in exerting fiscal discipline in the euro area, and how can it be corrected.

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