The recent European economic crisis has dramatically exposed the failures of the various institutional mechanisms in place to maintain economic stability in Europe, and has unveiled the difficulty in achieving international coordination on fiscal and financial stability policies. Drawing on the...

Bereits vor der Corona-Krise zeigte die Europäische Währungsunion (EWU) eine unbefriedigende wirtschaftliche Entwicklung mit niedrigem Wachstum und zu geringer Inflation. Zur Krisenbekämpfung ist die Koordination zwischen Geld- und Fiskalpolitik notwendig. Unzureichende Lohnsteigerungen, die...

This paper explores lock-in and lock-out via economic policy. It argues policy decisions may near-irrevocably change the economy's structure, thereby changing its performance. That causes changed economic outcomes concerning distribution of wealth, income and power, which in turn induces...

This paper uses hysteresis to develop the concept of policy lock-in and lock-out. Policy changes may near-irrevocably change the economy’s structure, thereby changing the distribution of wealth, income and power. That may lock-in policy by changing the political equilibrium. Exit costs that...

We trace the imprint of the ECB's expanded asset purchase programme (APP) on international bond portfolios and euro-denominated deposits. Our analysis suggests that non-bank financial institutions (NBFIs) located outside the euro area sold large volumes of euro area government bonds and kept a...

This occasional paper describes the monetary presentation of the euro area balance of payments and its use. The monetary presentation is a tool for assessing the impact of balance of payments transactions involving non-bank residents on monetary developments. The paper explains in detail the...

This paper presents the novel results from an internationally coordinated project by the International Banking Research Network (IBRN) on the cross-border transmission of conventional and unconventional monetary policy through banks. Teams from seventeen countries use confidential micro-banking...

This paper explores the feasibility of an idea proposed first by the German Council of Economic Experts in 2011 and revisited by Italian and French authorities in 2021: the one-off mutualization of some European legacy debt through the creation of a European Debt Management Agency (EDMA). The...

Following a period of subdued consumer price changes, inflation has recently surged to levels that are significantly impacting the behavior of households and firms. Although the underlying sources of inflation differ across major advanced economies, central banks have progressively tightened...

This paper employs two established macroeconomic models to show that fiscal policy in the euro area can help monetary policy in reducing inflation. Specifically, a fiscal consolidation of 1 percent of GDP for two years and 0.5 percent in the third year across the euro area would ease the policy...