“Does money growth tell us anything about inflation?“. Attention should be paid to a possible sequence of negative events: if inflation would start to be volatile and money growth remains high, efforts to control inflation could be undermined.
“Bank leverage constraints and bond market illiquidity during the COVID-19 crisis“. The onset of COVID-19 led to heightened uncertainty and a ‘dash-for-cash’, particularly in the mutual fund sector which faced fire sale pressure. This column analyses the role of bank leverage constraints as an amplifier of bond market illiquidity.
“Strategic Complementarity among Investors with Overlapping Portfolios“. Academics and regulators posit that mutual funds that engage in significant liquidity transformation can be systemically risky. This is because investors in these funds redeem at the fund’s net-asset-value and compete for a common fund liquidity pool.
“Fiscal arithmetic and risk of sovereign insolvency“. The record-high debt levels in advanced economies increase the risk of sovereign insolvency. Governments should start fiscal consolidation soon in an environment of low nominal and real interest rates and post-COVID growth.
“Dangers of unregulated artificial intelligence“. Over the last decade, artificial intelligence has made great advances and influenced almost all industries. This column argues that the current AI technologies are more likely to generate various adverse social consequences, rather than the promised gains.
“What is holding back artificial intelligence adoption in Europe?“. To accelerate the roll-out of AI technologyacross the European Union, policymakers should alleviate constraints to adoption faced by firms, both in the environmental context and in the technological context.
“The EU needs a permanent recovery fund social policy“. In 2020, EU member-states took a huge step forward in European fiscal integration. The recovery fund might come to an abrupt stop after 2026, when the RRF is expected to end. That would be a mistake: the RRF should instead become permanent and focus on climate investment to ensure the EU meets its carbon neutrality goal by 2050.
“Next Generation EU borrowing: a first assessment“. The Next Generation EU programme is radically changing the way the EU finances itself and interacts with financial markets. This paper assesses the first design decisions made by the European Commission and the issuances that have taken place so far. It also outlines the potential risks and opportunities linked to this upgrading of the EU borrowing.
“EU firms and the COVID crisis: So far so good, but uncertainty, lack of skills, and pockets of vulnerability remain“. This column uses data on 12,000 European firms from the European Investment Bank Investment Survey to show that the pandemic spurred many firms to start accelerating transformation efforts. Policy should seek to support this momentum amid post-pandemic economic recovery.
“An inclusive European Union must boost gig workers’ rights“. A European initiative strengthening rights for gig workers is welcome. A digitised economy should also be inclusive.