This paper investigates determinants of convergence in GDP per capita in the euro area and the EU between 1995 and 2021. It finds that the COVID-19 crisis temporarily slowed convergence but the estimated negative impact is significantly smaller than during the global financial crisis. Diverging...

The growing importance of services has led to significant structural change in advancedeconomies, with the service sector now accounting for the largest share of employment indeveloped countries. In his seminal model of the so-called cost disease of services, WilliamBaumol noted that the prices...

While macroprudential policy has mostly focused on the role of banks, we argue that pension funds are also important for financial stability. Drawing on previous research on pension funds, we explain how their actions can have a vital impact on other financial institutions as well as on...

The long-held truism that finance is always good for growth has been called into question by the global financial crisis. This article examines new evidence on the finance-growth nexus from a European perspective. More specifically, it compares the approach of many CESEE countries - i.e....

This paper analyses the adjustment mechanism in the euro area prior to the crisis. Results show that the real exchange rate adjusted to redress cyclical divergences and that after monetary unification, real exchange rate dynamics became less reactive to country-specific shocks but also less...

There are many reasons to reform the Stability and Growth Pact, but that reform is no panacea. This is because the euro area periphery has increasingly entered a debt conundrum.

Experience after the establishment of EMU shows that the behaviour of private consumers differs considerably among member countries and that average and marginal propensities to consume are fairly heterogeneous. In particular, there are clear differences between Germany and the rest of the euro...

This paper presents three simple policies for overcoming the crisis that can be implemented immediately and require none of the moves such as national guarantees or fiscal transfers to which many Europeans are opposed, nor moves towards federation that entail Treaty changes, which electorates...