EMU Monitor
A picture is worth a thousand words
05.06.2007
By: Paul De Grauwe, K.U. Leuven
Is the growth rate of money a good signal of future inflation? Sometimes it is useful to look at a picture. A picture is worth one thousand words, they say.
The Economic Consequences of Mr S.
07.05.2007
By: Jean Pisani-Ferry, Bruegel
In the aftermath of Nicolas Sarkozy’s resounding electoral victory, the three main questions are: Has he won a mandate for change? Which policies will he give priority to? And what will be the consequences for Europe?
Banks as hedge funds and hedge funds as banks
02.05.2007
By: Casper de Vries, Erasmus University Rotterdam
Since the demise of LTCM, supervisors are worried about the systemic risk of the hedge fund industry for the banking sector. This worry seems misplaced as, if anything, the banking sector is the more risky of the two industries.
Why Europe will not decouple from the US
17.04.2007
By: Alan Ahearne, Bruegel and NUI Galway
Rightly, or wrongly, business leaders around the world see the US as a locomotive for the global economy. Until we see more internal dynamism in the euro area those perceptions are unlikely to change.
Why the ECB is inconsistent
04.04.2007
By: Patrick Minford, Cardiff University
Michael Woodford proclaimed that the ECB's money pillar is redundant and misleading. Patrick Minford explains why Woodford has a point.
Why the ECB is still opaque
09.03.2007
By: Juergen von Hagen, University of Bonn
The only plausible explanation for the yesterday's rate rise is that the ECB wants to assure that there is no base drift in the price level over the longer term. If this is what the central bank wants to do, it does not explain its intentions well.
The case for a macro prudential framework
01.03.2007
By: Casper de Vries, Erasmus University Rotterdam
World monetary policy has been too lax for too long. The liquidity overflow should only be put back in the box through a gradual tightening of the money markets.
How to strenghten the EU's external representation: A modest proposal
21.02.2007
By: Barry Eichengreen, University of California, Berkeley
The EU is larger economically than the US, but exerts less influence in international monetary and financial negotiations. This is an untenable position in a world where the balance of economic power is shifting toward emerging markets.
How to extract information from the monetary pillar
06.02.2007
By: Georg Rich, Rich International Consulting
Money has largely gone out of fashion among monetary policy makers. It is not surprising, therefore, that the ECB’s second pillar has aroused controversy.
What does a flat yield curve tell us?
30.01.2007
By: Chris Waller, University of Notre Dame
How do we interpret a flat yield curve in terms of the ECB’s credibility as an inflation fighter? There are three potential explanations, not all negative.
Some thoughts on the Lucas Paradox
23.01.2007
By: Alan Ahearne, Bruegel and NUI Galway
The Lucas paradox says that while economic theory predicts that capital flows from rich to poor countries, there is little empirical evidence in support of the theory. But for the euro area member countries, the theory seems to be just right. One explanation is that economists may have underestimated the extend to which people prefer to keep their savings in their own currency even if there are higher return investments available in foreign currencies.
Should central banks target anything other than inflation (such as money supply)?
15.01.2007
By: Patrick Minford, Cardiff Business School
The ECB has ‘two pillars’- an inflation target and a money supply growth target range. The two are in conflict. Battle rages monthly within the ECB council. What should it do?