How will sovereign debt markets evolve in the 21st century? We survey how the literature has responded to the eurozone debt crisis, placing "lessons learned" in historical perspective. The crisis featured: (i) the return of debt problems to advanced economies; (ii) a bank-sovereign "doom-loop"...

Proposals for Eurozone reform aim to complete its institutional architecture by securing stability without creating moral hazard. Such policy arguments inevitably rely, however, on implicit assumptions about justice, or on what is owed to whom. A common assumption is that member states are...

An extensive literature praises economic integration and monetary unions as powerful means for economic convergence between, and the growth of, nations. Several potential factors have been flagged for successful economic convergence, such as labor availability and mobility and the role of...

Economists in the public are accused of propagating highly professional, but unrealistic theories that mislead market agents and policy makers to place too much confidence in rational behaviour and market equilibrium. The paper analyses to what extent the US banking crisis and the euro crisis...

What is the effect of monetary policy on bank profitability? This paper uses a new long-run dataset spanning 17 countries and 145 years to address this question. I show that a monetary policy tightening leads to an increase in the spread between lending and deposit rates. But even though spreads...

In this study, we approximate the financial cycle in Europe by combining potential common and relevant financial indicators. We consider different credit aggregates and asset prices but also incorporate banking sector indicators for 11 European countries. We develop seven different synthetic...

This paper investigates why Europe fared particularly poorly in the global economic crisis that began in August 2007. It questions the self-portrait of Europe as the victim of external shocks, pushed off track by reckless policies pursued elsewhere. It argues instead that Europe had not only...

I find that the Eurosystem can stimulate the economy beyond the policy rate by increasing the size of its balance sheet or the monetary base. The transmission mechanism turns out to be different compared to traditional interest rate innovations: (i) whilst the effects on economic activity and...

I find that the Eurosystem can stimulate the economy beyond the policy rate by increasing the size of its balance sheet or the monetary base, that is so-called quantitative easing. The transmission mechanism turns out to be different compared to traditional interest rate innovations: (i) whilst...