Bertie's legacy

By: Alan Ahearne, Bruegel and NUI Galway

As Bertie Ahern's ten-year tenure comes to an end, so does Ireland's extraordinary economic boom.

The cause of tax evasion are taxes

By: Wolfgang Münchau

Germany's jihad against tax evaders is a macroeconomic non-event.

A reality check on German wages - no reason to panic

Today, there are two short reports. The first big wage agreement has been concluded in Germany, in the chemical industry, and it looks fine. The headline wage increase is 4.3%, but this translates to a de facto increase in wage costs of only 2% for chemical industry employers. In a seperate report, we look at growing pressure from the export industries in the 14 African countries to drop the fixed-exchange rate peg to the euro.

Could this be the end of the European rate hiking cycle? Quite possibly

The important news from today’s ECB press conference is that we are either close, or at the top of the interest rate cycle. Jean-Claude Trichet was hawkish in terms of his rhetoric. But he was dovish not to precommit the ECB to anything. This may well be the end of the rate-hiking cycle. If not, we may be seeing one more rate rise, but a rate increase to 4.25% or higher is now very improbable.

What if the Fed and the ECB are wrong?

We were not surprised that Ben Bernanke did not hesitate a second to calm markets with his repeated mantra about the soft landing and second-half recovery scenario. Obviously, this is what the Fed’s own internal economic model is saying. But how can he be so sure? It is rare for central bankers to be so unequivocal. You would normally expect his forecasts to be embedded in upside and downside risk scenarios.

After yesterday's joyride: three real reasons to panic

When markets can panic for no real reason, just imagine what would happen if they were given a real reason. What triggered Tuesday’s mini-crash was an unconfirmed rumour in Shanghai that the Chinese authorities would clamp down on loans for share purchases. We have no idea – and could not care less – how the Chinese authorities regulate their markets. The things that worry us are much closer.

Why the Europeans remain obsessed about the yen

In today's ECB Watch update we take a look at the continued concerns by the Europeans about the persistent weakness of the yen, and the reasons behind it. We also take a look at the Taylor rule, which suggests that the ECB should not be raising interest rates beyond the current 3.5%. We may be about to see a real life experiment of the usefulness, or otherwise, of the ECB's monetary pillar.