Why the I-5 bridge fell down: The economics of the infrastructure deficit http://t.co/OYn4CCVdHe
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Europe Channel: Latest Posts
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Europe
Why Cyprus Matters
Cyprus measures 0.2 percent of the Eurozone economy. A proposed rescue package is only €17 billion, of which perhaps €9 billion will be used to recapitalize banks weighed down by bad loans and losses on the Greek government debt. A new government has signaled its commitment to reform, and creditors want to get a deal [...]
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Europe
Italy: The Dragon and the Cricket
The difficulty in making sense of the results of the Italian election has produced the common imagery of a clown to capture the comic Grillo, who appears to be the most unlikely politician since Lech Walesa, the unemployed electrician that led Solidarity in Poland, helping to bring the fatal crisis upon the Soviet Union, and [...]
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Don't Shoot the Messenger
The Great Portuguese Hollowing Out
With every passing day Portugal has less and less economy left, while fewer and fewer people remain to try to pay down the debt. As Portuguese President Aníbal Cavaco Silva once put it, “A country without children is a nation without a future.” He was, of course, referring to his country’s ultra-low birth rate, which [...]
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Europe
Fiscal Tipping Points
At the recent U.S. Monetary Policy Forum I presented the paper Crunch Time: Fiscal Crises and the Role of Monetary Policy, along with co-authors David Greenlaw (Managing Director and Chief U.S. Fixed Income Economist for Morgan Stanley), Peter Hooper (Managing Director and Chief Economist for Deutsche Bank Securities Inc.), and Frederic Mishkin (professor at Columbia University and former [...]
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Europe
European Ships Switch to LNG to Cut Emissions and Comply with EU Law
Ports in Northern Europe are switching to natural gas as a cleaner, cheaper way of powering ships, compared to the traditional fuel oil. A European Union law has set the target to cut greenhouse gas emissions from the shipping industry to 40% of 2005 levels by 2050. Switching to liquefied natural gas will play a [...]
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Europe
A Response to ‘Why Politicians Ignore Economists on Austerity’
Simon Wren-Lewis: … So why are politicians, in the Netherlands and elsewhere, pursuing a policy that most economists regard as an elementary error? This was a question raised by Coen Teulings, who is the director of the CPB, the Dutch fiscal council. He was commenting on an IMF sponsored conference in Sweden, at which most economists argued [...]
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Europe
EU Shying Away from Annual Updates of RRP?
On 28 February 2013, the Presidency of the EU Council published a compromise proposal(dated 15 January 2013) relating to the proposed directive establishing a framework for the recovery and resolution of credit institutions and investment firms (the “RRD”). The compromise proposal makes a large number of suggested changes to the text of the RRD, most of [...]
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Europe
Technocrats in Italy Scheming to Steamroll Voter Rejection of Austerity
Even though we were keen about how voter repudiation of austerity in the Italian elections last week was throwing a wrench in the Troika’s austerity plans, we also warned, based on the example of Greece, that they’d try to neutralize the results. That effort is already underway. Ambrose Evans-Pritchard’s latest article, “Anger builds in Italy [...]
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Thoughts From Across the Atlantic
Another Look at Ricardian Equivalence: The Case of the European Union
The so-called Ricardian equivalence suggests that a government will have the same effect on private spending whether it raises taxes or takes on additional debt to finance higher government spending. The logic behind it is that as the government gets more indebted, people would put aside more money in expectation of higher taxes in the [...]
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Europe
France’s Firebreak Weakens
France had pinned its hope that threat to EMU would be turned back before the wolf came it its door. The Italian political tensions come at the poor time for France. Its ability to absorb shocks is terrible constrained. Recall what has happened in recent days. Q4 GDP showed a larger contraction than expected. The [...]
