Over the past several decades, public debt has increased substantially in many OECD countries, particularly in the aftermath of recessions. The extent of this increase and the resulting debt levels varied across countries, partly reflecting differences in average budget balances. Despite rising...

During the first decade of the currency union, business cycle fluctuations among Euro Area countries were relatively synchronised and similar in magnitude. This concordance disappeared during the 2008 financial turmoil and the following European sovereign debt crisis, a time when key flaws in...

New variants of the virus are spreading which, together with seasonal effects, are estimated to be able to raise effective reproduction numbers by up to 90%. Meanwhile, many countries are rolling out vaccination programmes, but at varying speeds. Hence the race is on to beat the variants with...

Resolving stark differences between rich and poor countries in vaccine coverage against COVID is a global policy priority for 2022. However, even among OECD countries, there currently remain surprisingly large differences in vaccine coverage and this paper attempts to explain these differences,...

A problem associated with inflation differentials in monetary unions is that the “crowding-in” effect of lower real interest rates associated with high inflation will initially outweigh the loss of competitiveness (crowding out). The crowding-in effect may produce volatility in house prices,...

The 2005 reform of the EU Stability and Growth Pact has provided leeway for governments to let their fiscal deficit temporarily breach the 3% rule to finance the immediate budgetary cost of structural reform, such as compensation schemes to offset redistributive effects. Against this backdrop,...

Switzerland is a highly decentralised country with large spending and revenue-raising powers devolved to cantons and municipalities. The federal system, in combination with an extensive use of direct democracy, has contributed to keep public spending at a relatively low level in international...

Accounting conventions usually leave some room for judgment, which governments may be tempted to take advantage of, especially when fiscal rules bite or threaten to do so. The European experience over the past decade -- documented here in great detail -- illustrates that fiscal gimmicks come in...

Currency boards have been portrayed as an extreme way of creating currency quality and improving monetary policy credibility in emerging market economies. Yet the link between currency board operations and credibility is far from obvious. Indeed, under the heading of currency boards, there is in...

What changes are needed to make counter-cyclical economic policy more effective in the aftermath of the recent crisis? An important lesson from the severity of the recent recession is that policy in various areas will have to be more prudent during upswings and to build in greater safety margins...