News Archive

The expenditure necessary to avoid the Covid-19 health crisis turning into a long-lasting deep recession is enormous and raises the issue of how it should be financed: through new debt, or monetization? Monetization - defined as the financing of public expenditure through money creation by the central bank without being reimbursed by the government - has long been rejected by mainstream macroeconomics. Axelle Arquié (EconPol Europe, CEPII), Jérôme Héricourt (EconPol Europe, Université de Lille & CEPII) and Fabien Tripier (EconPol Europe, Université Paris-Sa

Between 2013 and 2015, in the aftermath of the global financial crisis, the Portuguese government revoked four holidays for public and private employees - but the revocation seems to have served little economic purpose and been no more than a ceremonial gesture. In this paper, authors António Afonso (EconPol Europe, Universidade de Lisboa; REM/UECE), Maria João Guedes (Universidade de Lisboa; Advance/CSG), Pankaj C.

Dorine Boumans, Sebastian Link and Stefan Sauer (EconPol Europe, ifo Institute) surveyed 1000 economic experts in 110 countries on the economic effects of the COVID-19 pandemic and the effectiveness of different policy measures to combat the crisis for different countries.

In the search for the right European financing instruments, the purported advantages of corona bonds over the ESM are meagre to non-existent, says Friedrich Heinemann (EconPol Europe, ZEW): the challenge we face is to contain the spread of COVID-19 while stabilising the economy and ensuring eurozone states have sufficient liquidity, and the ESM is a suitable tool for pursuing these ends.

Does the coronavirus crisis call for solidarity within the EU, or within the euro area: Daniel Gros (EconPol Europe, CEPS) argues that being hit by an unforeseen epidemic has nothing to do with euro area membership and the present situation is a case which requires solidarity at EU level. And, he says, there's a plausible and simple way to organise a real expression of EU solidarity without engaging in any large-scale financial transactions.