Should central banks publish their interest rate forecasts?

By: Stefan Gerlach, University of Frankfurt

No. The level of uncertainty is simply too high.

Fannie and Freddie on the rope

By: Wolfgang Münchau

When house price are expected to decline by 30%, some strange things are happening

Economic reforms in the euro area: Is there a common agenda? by Xavier Debrun and Jean Pisani-Ferry, Bruegel

Despite the recent growth revival, the state of the euro area economy remains vexingly disappointing. What is taking place is too little, too late and the very fact that output growth only started to pick up in the fourth year of the global recovery suggests that something must be wrong. Against this background, the overriding priority remains to design and implement policy packages aiming at: Increasing potential output through higher employment, higher labour participation, and higher productivity; Ensuring that actual output does not lag behind gains in potential output.

Private versus Public Banks: The academic evidence

In France, about two thirds of the banking system is owned by the public sector. In Germany, that proportion is even higher – about 75%. In Spain, the public sector owns no banks outright, but the public sector is still a dominant player among the savings banks. In Italy, the situation is interesting. In 1990, Italy had a similar banking structure to Germany, with about 70% of the banking sector stated-own. That proportion went down to 9% by 2005.

 The creation of a single European financial market is often viewed as one precondition for the success of monetary union in the long-run. The EU’s Financial Services Action Plan is one part of the process towards a harmonized financial sector in the EU. But for the euro area specifically, the ambitions the ambitions should go beyond...

What the European Constitution means for the Euro Area

The Constitution makes a number of changes to the Union's economic policy and monetary policy, in particular: strengthening the capacity of the Union and of the euro zone in particular, to act; establishing the European Central Bank (ECB) as an EU institution; considerably simplifying the texts.

Should a modern central bank still care about money?

Does money still matter for modern monetary policy? If you thought the beast was dead, you could not be more wrong. The subject of whether monetary aggregates matter for a central bank remains one of the big issues of modern monetary economics, but the discussion about this subject differs fundamentally from the discussion several decades agoThis is a distinctly European issue in the sense of the major central banks in the world, only the European Central Bank still makes explicit reference to money in its policy formulation. The ECB has adopted a two-pillar strategy, in which standard economic analysis, based on a neo-Keynesian forecasting model, forms the first pillar, while monetary analysis constitutes the second pillar of policy. The ECB is sometimes described as monetarist, partly...

Should Central Banks target asset prices?

One of the most controversial issues in modern macroeconomics is the question whether the central should prick, target, take an interest or ignore asset price bubbles. It is a multi-faceted subject, on which no consensus has yet emerged, which is in part a reflection of much ongoing research in this area. This briefing note is in part related to the briefing note about whether money has a role to play in modern central bank. Some of the arguments are parallels, and pro-bubble-pricking advocates also tend to favour to rely on monetary aggregates, at least to some extent.

Interest in this subject was sparked by the Federal Reserve's monetary policy in the mid-to-late 1990s, a period characterised by Alan Greenspan, former governor of the Fed, as one of "irrational exuberance" as early as...