We analyze whether a redistributive government should provide ex ante insurance against unfortunate outcomes or whether it should instead rely on transfers for redistributing income ex post. To this end, we develop a model of education in which individuals face educational risk and wage...

The euro area is experiencing a severe and highly complex crisis. It comprises three problem areas, the diffi culties of some highly indebted European sovereigns to ascertain funding at palatable cost, the disconcerting fragility of the European banking system and disappointing growth prospects...

Since the European Central Bank’s (ECB’s) 2003 strategy review, the importance of macro-financial amplification channels for monetary policy has increasingly gained recognition. This paper takes stock of this evolution and discusses the desirability of further incremental enhancements in the...

The idea of a Banking Union emerged in the aftermath of the global financial crisis. Ten years on, two of its three pillars, the Single Supervisory Mechanism and the Single Resolution Mechanism, have proven to be a success with regard to financial integration and stability. In this Policy Brief,...

Macroprudential policy is a relatively new policy field. Its goal is to preserve financial stability and to prevent the build-up of systemic risk that may have adverse effects for the functioning of the financial system and for the real economy. New institutions have been tasked with the...