In the last decade, over half of the EU countries in the euro area or with currencies pegged to the euro were hit by large risk premium shocks. Previous papers have focused on the impact of these shocks on demand. This paper, by contrast, focuses on the impact on supply. We show that risk...

The notable rebound of U.S. manufacturing activity following the Great Recession has raised the question of whether the sector might be experiencing a renaissance. Using panel regressions, we find that a depreciating real exchange rate, an increasing spread in natural gas prices between the...

Under the EU-wide Emission Trading Scheme (ETS), CO2 allowances have thus far been allocated largely free of charge. This paper presents a didactic synthesis on the impact of the ETS and argues that such a cost-free allocation will lead to an increase in electricity prices even when strong...