How abnormal was the stock market in October 2008?

By: Paul De Grauwe, Leonardo Iania, Pablo Rovira Kaltwasser

Last month saw a stock market move with a probability of occurring only once in 73,357,946,799,753,

900,000,000 years. What does this tell us about modern finance?

The depression of 2009

Wrong government policies on both sides of the Atlantic are turning a crisis into a catastrophe.

Some thougths about the future of the euro

By: Susanne Mundschenk and Wolfgang Münchau

Forget Italy, or Spain. The real danger to the long-term sustainability of the euro are the continued ideological differences between France and Germany, which have widened since the start of the EMU in 1999.

EMU and inequality: The facts

By: Giuseppe Bertola, University of Turin

Empirical research shows that EMU improves economic performance, but is also associated with higher inequality and lower social spending. This casts doubt on the political sustainability of EMU without social-policy integration and much deeper financial market development. Thinking about EMU’s future, it would be wrong and dangerous to disregard the implications for income inequality and its remedies.

How to make the euro more sustainable

By: Mike Wickens, University of York

The euro area faces two problems, one for the long term and one for the short term. The long-term problem is that, sooner or later, the divergence of price and output levels will threaten the sustainability of the euro. The short-term problem is that, having given up two of their three macroeconomic policy instruments, countries have only their social instrument left to stabilise their economies. This suggests that the euro area countries require greater social policy flexibility and not less.

Is Sarkozy winning?

By: Wolfgang Münchau

Germany should come up with its own plans for policy coordination. Otherwise, Sarkozy is going to win this debate.