In this paper we show that, in the process of estimating the natural rate of interest and the potential level of output, together, the algorithmic techniques alongside the natural and unavoidable expert judgment tend – with a high likelihood – to generate systematic biases of estimates.
The vote for Brexit has shocked both the United Kingdom and the European Union, compounding the pressure on an EU battered by multiple crises. Amid the refugee influx and the continuing troubles of the Eurozone, can the Union pull itself together in the aftermath of Brexit?
All eyes in Europe are riveted on the migrants/refugees’ crisis, which has come as another major shock following the financial crisis and the euroarea troubles of recent years. The migrants/refugees’ crisis and the euroaria troubles have revealed the fragility of the Union, which, for many, is likely to be a shock in itself. More than worrying is the pretty low response capacity of the Union to such shocks. Can the Union pull itself together, can it reengineer itself? Below is a reading of the Union’s turmoil and avenues for policy action are outlined
In this paper we show that monetary policies aiming at inflation targeting could not unwind global imbalances in an orderly manner if the GDP level is at potential and growth rates equal potential rates in deficit countries. Instead, as long as output is below potential, easing monetary policies could result in bringing global imbalances to pre-crisis levels. This outcome depends on the state of domestic demand in surplus countries. In the particular case of constrained domestic demand in countries with excess savings, monetary policy easing could result in currency depreciation and, thus, in higher exports and even larger excess savings
Central banks need to change what they communicate, when they communicate, how they communicate and why they communicate…
To join the Eurozone a better functioning of this area has to blend with substantial real, structural economic convergence
Will Romania post a current account surplus in 2015? It is possible, but we do not know how likely. What we do know is that the occurrence of a current account surplus was much more likely before the VAT rate cut in June 2015…
Preserving financial stability is crucial and this mission hinges a lot on the health of the banking sector, on the effectiveness of macro-prudential tools…
In a world of low interest rates, central banks might have to promote the humble word to the rank of policy instrument…
As the Romanian government expanded its Redeem Program, from old cars to old fridges and vacuum cleaners, I wonder if it could not extend it to communist time economics books, to be exchanged to market economy books of economics…