Visiting scholar Xavier Debrun, and Bruegel director Jean Pisani-Ferry contribute to the emerging discussion on reform strategies in the euro area. An earlier version of this note was presented to the Eurogroup Working Group of the Economic Policy Committee of the EU.

Europe's banking system has been in a state of systemic fragility since 2007-08. The current phase is marked by a sequence of interactions between sovereign problems and banking problems, resulting in gradual contagion to more countriesand more asset classes. The banking and sovereign crises are...

Jean Pisani-Ferry and André Sapir call for more focused guidelines in Lisbon 2, an explicit methodology for evaluating National Reform Programmes, and better ownership of these programmes to encourage national debate on key areas of underperformance in member states. This paper, prepared at the...

In this paper we derive the correct solution of optimal closure of the state sector studied in Section 6.4 of Aghion and Blanchard (1994). Aghion and Blanchard only present an 'approximate' solution which entails a constant unemployment rate in what they call a turnpike approximation. We show...

Populist experiments are recurrent in Latin America. One of the most conspicuous cases is that of Bolivia in the 21th century under the government of Evo Morales and his Movement to Socialism (MAS). A major distinctive feature of this populism is the incorporation of the ethnic and linguistic...

This paper analyses how tax morale and countries’ institutional quality affect the shadow economy, controlling in a multivariate analysis for a variety of potential factors. The literature strongly emphasizes the quantitative importance of these factors to understand the level and changes of...

This paper analyses how governance or institutional quality and tax morale affect the shadow economy, using an international country panel and also within country data. The literature strongly emphasizes the quantitative importance of these factors to understand the level and changes of shadow...

Formerly a favourite location for private capital inflows, Brazil was virtually cut off from further bank lending in the 1980s. The country's rating in secondary loan markets plummeted, and foreign direct investment dwindled. New external financing was replaced by an accumulation of interest...