Some thoughts on macroeconomic models

By: Paul De Grauwe, K.U. Leuven and CEPS

The limits of DSGE models as tools of analysis for central banks.

Ben's depression

By: Wolfgang Münchau

A return to a monetary policy to stabilise prices ended the Great Depression in the 1930s. This time it will work the other way round. Once the Fed is forced back onto a path of price stability, our depression will begin.

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.

Why the euro will soon replace the dollar as the world's reserve currency

The predominance of the dollar as the global reserve currency is bound to end in any case. The credit crisis will greatly accelerate that process.

Genuine reforms please, not more taxis

The Attali Commission repeated all the mistakes economic reformers made in the past. It produced a list that is too long and too unfocused.

Central bankers cannot stop this contagion

Cutting interest rates gives the worst of all worlds: no economic relief, plus a rise in inflationary expectations.

A crisis is in store for Spain's election victor

Whoever wins Sunday's Spanish elections will have to sort out a huge mess. Spanish house price are set to fall by 50% in real terms, as the country's bubble-growth model is imploding.