The response in 2008-09 to the global financial crisis was in many ways a high water mark for transatlantic policy coordination. The major economies of the EU and the US rapidly agreed on a series of measures to limit the crisis. However, the common approach has since unraveled. This paper...

The search for solutions to the euro crisis is based on a partial diagnosis that overemphasises the lack of enforcement of existing fiscal rules. Europe's leaders should rather address the euro area's inherent weaknesses revealed by the crisis. At the core of euro-area vulnerability is an...

Euro-area inflation has been below 1 percent since October 2013, and medium-term inflation expectations are well below 2 percent. Forecasts of the return to target inflation have proved wrong. The European Central Bank should act forcefully, but should undermine neither the major relative price...

The general macroeconomic situation and weak inflation dynamics justified quantitative easing (QE) in the euro area. Doubts have emerged about its effectiveness as inflation has remained weak. However, we do not know where inflation would have been without QE and the still large slack in the...

* Inflation rates can differ across regions of monetary unions. We show that in the euro area, the US, Canada, Japan and Australia, inflation rates have been substantially and persistently different in different regions. Differences were particularly substantial in the euro area. Inflation...

All Eurosystem credit operations, including the important open market operations, need to be based on adequate collateral. Liquidity is provided to banks against collateral at market prices subject to a haircut. The Eurosystem adapted its collateral framework during the crisis to accept...