Economic sentiment indicators can provide a wealth of information for macroeconomic policy formulation and analysis. Despite this, economic sentiment is often neglected by mainstream economics. This article assesses whether there is a potential role for economic sentiment to amplify business...

A monetary union among autonomous countries cannot simultaneously maintain an independent monetary policy, national fiscal sovereignty and a no-bailout clause. These three features make up an impossible trinity, and attempts to preserve all three concurrently will ultimately end in failure. In...

The extensive public sector measures in support of the financial sector have been key to managing the financial crisis that erupted in mid-2007 and intensified after the bankruptcy of Lehman Brothers. This article looks into the measures taken by central banks to contain the impact of the...

The German federal government's fiscal consolidation package, announced in June, is designed to permanently reduce the federal deficit to a new target level. This article uses a three-region version of the European Commission's QUEST model to gauge the impact of the package on Germany and the...

At the height of the European sovereign debt crisis, the European Central Bank decided to purchase distressed European government bonds. Even worse, and more importantly, the ECB is providing direct support of several hundred billions of euros to troubled banks via its normal monetary policy...

Economists are currently divided over the question of what represents a more immediate threat to the global economy - deflation or excessive infl ation. Using stochastic simulations, this article extrapolates the likely inflation rates in individual European countries and the euro area as a...