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Regional Papers on Europe

The Economic Impact of Italian Market Reforms The Economic Impact of Italian Market Reforms
Giovanna Maria Dora Dore, World Economics, December 2017
Italy’s labour market is highly segmented by gender and age with high labour costs, high rates of self-employment and undeclared work, high minimum wages, strong dismissal constraints and uneven job opportunities between Northern and Southern regions. Italy has experien ... More

New Estimates of Regional GDP in the UK New Estimates of Regional GDP in the UK
Julian Gough, World Economics, June 2017
Real GDP is estimated by applying a price-level estimate or deflator to nominal GDP, but GDP levels in the UK’s 12 inhabited regions are only reported at nominal prices with no allowance for differences in regional prices. A purchasing power parity (PPP) rate for the £ ... More

The Environmental Kuznets Curve The Environmental Kuznets Curve: The Validity of Kuznets and its Policy Implications
Harry Booth, World Economics, March 2017
The Kuznets curve is an income inequality measure used in development studies which predicts an inverse-U shape with inequality first rising with industrialisation and then declining, as more and more workers join the high-productivity sectors of the economy. Criticism ... More

Exploding Debt Syndrome:  The Politics of the Greek Debt Crisis Exploding Debt Syndrome: The Politics of the Greek Debt Crisis
Elliot Y. Neaman & Shalendra D. Sharma, World Economics, September 2016
The economic roots of the Eurozone’s sovereign debt crisis are fairly well understood by scholars and analysts, but the political forces behind the crisis less so, despite the fact that the Eurozone predicament derives fundamentally from an intersection of mostly politi ... More

The Eurozone: Was the UK Right to Opt Out? The Eurozone: Was the UK Right to Opt Out?
Julian Gough, World Economics, September 2015
This article examines the performance of the British economy since the beginning of the single European currency in 1999, in relation to that of the Eurozone countries. The aim is to consider whether the retention of sterling with the freedom to pursue an independent mo ... More

The IMF’s Uneasy Excursion into the Euro Zone The IMF’s Uneasy Excursion into the Euro Zone
Graham Bird, World Economics, September 2015
Much of the evolutionary history of the International Monetary Fund reflects its responses to unanticipated events. The crisis in the Eurozone at the end of the 2000s was largely unexpected. For many years prior to the crisis, the IMF’s clientele had been made up of low ... More

Measuring GDP in Europe Measuring GDP in Europe
World Economics, June 2015
In Europe the quality of national income statistics is less constrained by the capacity and resources devoted by national statistics offices to follow international best practice than is the case in many other parts of the world. In addition the members of the European ... More

What is Britain worth to the next generation? What is Britain worth to the next generation?
Angus Hanton, World Economics, June 2015
Government economic policy implicitly aims to build up useful reserves for future generations, or at least to not burden our children and grandchildren with unsustainable debt. Surprisingly, even though this must be an important policy objective, it is rarely discussed ... More

Is part of the Latvian economy already in the middle-income trap? Is part of the Latvian economy already in the middle-income trap?
Igors Kasjanovs, World Economics, March 2015
There are fears that the observed moderation of growth rates in Latvia suggest it may soon be stuck in a Middle Income Trap. No uniform understanding has been reached as to what a Middle Income Trap is and what signs testify to its existence. In order to avoid the dange ... More

The Economic Future of Europe The Economic Future of Europe: Change of diet or premature death?
Jan Libich, World Economics, December 2014
What does the economic future hold for Europe? In the aftermath of the 2008 crisis, four macroeconomic threats have been subject to heated debates by economists and politicians. Some fear that Europe may face (1) secular stagnation, (2) sovereign defaults, (3) excessive ... More

The Greek Economic Crisis - is the Euro to Blame? The Greek Economic Crisis - is the Euro to Blame?
Andreas Hatzigeorgiou, World Economics, September 2014
The euro has been at the centre of reporting and discussion on Greece’s economic crisis. This article analyses the build-up, outbreak and development of the crisis in Greece, with the aim to answer whether the crisis can be traced to the country’s entrance into the Euro ... More

Strengthening the Early Warning Exercise Strengthening the Early Warning Exercise: Enhancing IMF and FSB coordination
Bessma Momani, Skylar Brooks, Michael Cockburn, Warren Clarke & Dustyn Lanz, World Economics, September 2013
Following the 2007–2008 global financial crisis, the G20 leaders tasked the International Monetary Fund (IMF) and the newly created Financial Stability Board (FSB) to jointly undertake Early Warning Exercises (EWEs) in order to identify vulnerabilities within the global ... More

The EMU Versus the EPU The EMU Versus the EPU: A historical perspective on trade, payments and the European financial crisis
Juan Carlos Martinez Oliva, World Economics, June 2013
This article draws upon the analogy between the current European institutional setting, in the face of the current European crisis, and the rules and institutions that were established in the post-war years to achieve trade liberalisation and a multilateral payments sys ... More

Light at the End of the Tunnel Light at the End of the Tunnel: The Eurozone’s sovereign debt problem
Elliot Y. Neaman & Shalendra D. Sharma, World Economics, June 2013
In October 2012, the Norwegian Nobel Committee honoured the EU with the 2012 peace prize for creating a peaceful and stable Europe after the destructive wars and economic crises of the twentieth century. However, it would have been more appropriate to bestow the prize o ... More

Maastricht: Union that Foresaw its Failure but Closed its Eyes Maastricht: Union that Foresaw its Failure but Closed its Eyes
Josh Rosner, World Economics, June 2013
As the global financial and economic crisis drags on, European regulators and policy-makers are continuing in their attempts to find a path from crisis towards stability, while balancing the public interests of independent sovereign nations desirous of a deeper financia ... More

The Eurozone The Eurozone: Whatever happened to convergence?
Julian Gough, World Economics, June 2013
This article examines the degree of convergence of the economies of the eurozone since the start of the single currency in 1999. Convergence, both in nominal and real forms, is measured using the coefficient of variation of several economic variables. The results sugges ... More

The Liquidity Consequences of the Euro Area Sovereign Debt Crisis The Liquidity Consequences of the Euro Area Sovereign Debt Crisis
William A. Allen & Richhild Moessner, World Economics, March 2013
We examine the liquidity effects of the euro area sovereign debt crisis on euro area banks as a group, on intra-euro area financial flows and on international liquidity. The lending capacity of the euro area banking system has been much weakened, despite the remarkable ... More

Life after Debt Life after Debt: The Greek PSI and its aftermath
Miranda Xafa, World Economics, March 2013
The Greek debt exchange (PSI) that took place in March 2012 was unprecedented in two ways: it was the biggest sovereign default ever and the first within the euro area. This paper examines the debt exchange and the subsequent debt buyback with a view to drawing lessons ... More

Understanding the Greek Crisis Understanding the Greek Crisis: Unlocking the puzzle of Greek banks’ deteriorating performance
Michael Mitsopoulos & Theodore Pelagidis, World Economics, March 2011
This paper focuses on the distortions that the Greek public debt has imposed on the Greek banking system, and suggests how these can be unwound. The low level of competitiveness of the Greek economy, which is well below the competitiveness of the developed countries, po ... More

Punishing European Cartels Punishing European Cartels
Cento Veljanovski, World Economics, March 2011
Antitrust authorities across the world are waging war against domestic and international cartels. The European Commission in particular has intensified its prosecution activities and increased dramatically the fines it imposes on cartelists. This article undertakes a st ... More

The Euro Crisis The Euro Crisis: It isn’t just fiscal and it doesn’t just involve Greece
Clas Wihlborg, Thomas D. Willett & Nan Zhang, World Economics, December 2010
The crisis in Greece and other mainly southern Eurozone countries has been discussed primarily as a fiscal issue. Current account deficits of the same countries have received less attention in spite of the relatedness of current account and fiscal deficits. We argue tha ... More

Global Financial Crisis Global Financial Crisis: A mid-year review of progress to date
Priya Nandita Pooran, World Economics, September 2010
This article reviews the degree of progress in financial regulatory reform and proposes new areas for inclusion in the reform agenda. It assesses the changes and responses to the proposed structure in the European Union and further discusses current responses to the fin ... More

The Eurozone: What Now? The Eurozone: What Now?
Graham Bird, World Economics, September 2010
The financial and economic crisis in Greece in 2009/2010 has reawakened interest in the future of the euro and the eurozone. After briefly explaining its sources, this article focuses on the longer-term issues to which the crisis gives rise. It explores the underlying w ... More

Greek Economic Statistics: A Decade of Deceit Greek Economic Statistics: A Decade of Deceit: So how come the rating agencies missed it again?
Brian Sturgess, World Economics, June 2010
This paper looks at the recent problems in official Greek economic data on public finances, whose reliability has been impaired by inappropriate accounting methods, the application of poor statistical methods and deliberate misreporting. Data on deficits and debt have b ... More

Greece and the State Greece and the State: Prometheus Bound?
Michael Massourakis, World Economics, June 2010
Pervasive state intervention in Greece has mired the economy with large-scale inefficiencies and an uneven playing field, protecting insiders and rent-seekers to the detriment of its underlying growth potential, with the political class at the same time failing miserabl ... More

Carbon Commitments Must Translate into Real Action Carbon Commitments Must Translate into Real Action
Andrew Raingold, World Economics, March 2010
The efforts of political leaders to negotiate a global agreement to reduce carbon emissions highlights the importance of consistent action at the domestic level. To gauge the efficacy of any international agreement and subsequent reductions, a clear, consistent and comp ... More

Public Health, Advertising and Reality Public Health, Advertising and Reality
Tim Ambler, World Economics, December 2009
Advertising is often blamed as the, or a, cause of public health problems such as misuse of alcohol or obesity. This paper suggests that the conclusions drawn by researchers owe more to their a priori attitudes than to an even-handed review of the evidence from both sid ... More

The IMF, the Credit Crunch and Iceland The IMF, the Credit Crunch and Iceland: A new fiscal saga?
Sheetal K. Chand, World Economics, September 2009
Iceland was badly hit by a fundamental mismatch between the assets and international liabilities of her banking system, with severe consequences for the welfare of the population. The country now has an International Monetary Fund programme. The paper asks three questio ... More

Sweden’s Bank Nationalisations Sweden’s Bank Nationalisations: Are there lessons for today?
Fredrik Erixon, World Economics, March 2009
Many banks are on the verge of bankruptcy and have received support from the government to stay afloat. Measures taken have not sufficed, and an increasing number of economists and commentators are calling for the nationalisation of banks in the United Kingdom and Unite ... More

Alternative Strategies for Fighting Unemployment Alternative Strategies for Fighting Unemployment: Lessons from the European experience
Gilles Saint-Paul, World Economics, March 2008
During more than three decades of protracted high unemployment, European countries have developed a variety of approaches in order to tackle the problem. These strategies differ in their philosophy, scopes and successes. A number of them can be understood in terms of sh ... More

Challenging Times for UK Monetary Policy Challenging Times for UK Monetary Policy
Andrew Sentance, World Economics, March 2008
Global economic developments have recently thrown up two major challenges for the setting of UK monetary policy. The recent global financial turmoil threatens to reinforce the slowdown in the UK and globally. But rising energy and commodity prices will push up inflation ... More

Can China Learn from Sweden? Can China Learn from Sweden?
Arne Bigsten, World Economics, June 2007
China is undergoing a very rapid process of structural and institutional transformation, which has led to dramatic increases in income levels. During this process, the country is facing a series of development challenges that need to be dealt with in order to sustain gr ... More

How Can Norway Become A Climate-Friendly Society? How Can Norway Become A Climate-Friendly Society?
Jørgen Randers & Knut H. Alfsen, World Economics, March 2007
In March 2005, the Norwegian Government appointed a seven-person expert Commission on Low Emissions and asked it to describe how Norway could cut its greenhouse gas emissions by about two–thirds below its Kyoto obligation, by 2050. The Commission delivered its unanimous ... More

The EU, the Middle East, and Regional Integration The EU, the Middle East, and Regional Integration
Bessma Momani, World Economics, March 2007
The European Union’s venture into enhancing trade linkages with the Middle East, as conceived by the 1995 Barcelona Process, had high hopes but failed in producing the intended political and economic deliverables. The Euro–Mediterranean Partnerships were flawed, as they ... More

Has the European Social Model a Future? Has the European Social Model a Future?
J. R. Shackleton, World Economics, September 2006
The European Social Model, involving high levels of government spending and taxation, labour and product market regulation and the involvement of the “social partners”, is in crisis. The core European economies are experiencing low economic growth, slow job creation and ... More

Russia at the Crossroads Russia at the Crossroads: Padma Desai on transition, reform, and the legacy of Yeltsin’s ‘kamikaze crew’
An interview with introduction by Brian Snowdon
World Economics, June 2006
To set the interview in context, Brian Snowdon first traces out some important landmarks in twentieth-century Russian/Soviet Union history. In the conversation that follows, Professor Desai gives her views on a number of key issues relating to the decline of the Soviet ... More

European Financial Market Integration European Financial Market Integration: Distant dream or nascent reality?
Patrice Muller, World Economics, September 2004
European Monetary Union and a vigorous legislative agenda have profoundly changed the environment in which the European financial services industry operates. These developments should have contributed to a deepening of financial market integration in the European Uni ... More

Does European Union Environmental Policy Pass a Cost–Benefit Test? Does European Union Environmental Policy Pass a Cost–Benefit Test?
David Pearce, World Economics, September 2004
Most European Union countries are committed to some form of regulatory impact assessment, and in some cases these assessments involve the formal use of cost–benefit analysis. The European Treaty of Union also calls for a comparison of costs and benefits for all Europ ... More

Fifty Years of Economic Growth in Western Europe Fifty Years of Economic Growth in Western Europe: No longer catching up but falling behind?
Nicholas Crafts, World Economics, June 2004
Productivity growth in virtually all west European countries exceeded that of the United States throughout the period 1950 to 1995. Since then American productivity performance has strengthened and that of the EU has weakened. The most important reason is contrasting ... More

A Single European Market in Asset Management A Single European Market in Asset Management: Vision and reality
Friedrich Heinemann, World Economics, March 2004
In spite of progress with integration, the European single market is still far from perfect. In particular, financial services markets are still heavily segmented along national borders—even in the era of the Internet and the Euro. In order to understand the reasons ... More

Five Centuries of Energy Prices Five Centuries of Energy Prices
Roger Fouquet & Peter Pearson, World Economics, September 2003
Concerns about rising energy prices tend to occur in times of economic expansion, to disappear in times of recession. A recurring fear is that, in the long run, real energy prices will trend upwards. This paper presents evidence from five hundred years of prices of e ... More

Is Economic Growth Good For Us? Is Economic Growth Good For Us?
Nicholas Crafts, World Economics, September 2003
This article reviews Britain’s experience of economic growth in the twentieth century. It argues that average living standards have risen much more rapidly than is generally appreciated. The main reasons for this include increased life expectancy which is highly valu ... More

Does Britain Need More Immigrants? A Debate Does Britain Need More Immigrants? A Debate
Nigel Harris & David Coleman, World Economics, June 2003
In this debate, Nigel Harris and David Coleman discuss the pros and cons of migration. Taking the case of Britain, they address issues such as the desirability or otherwise of migration controls, gains and losses from migration, the ‘optimum’ size and composition of ... More

Measuring Consumer Inflation in the United Kingdom Measuring Consumer Inflation in the United Kingdom: Recent developments and the future outlook
David Fenwick, World Economics, March 2003
Responding to Mick Silver’s proposals regarding the RPI, David Fenwick of the ONS summarises some of the issues that confront compilers of price indices. ... More

Some Proposed Methodological Developments for the UK Retail Prices Index Some Proposed Methodological Developments for the UK Retail Prices Index
Mick Silver, World Economics, March 2003
The Retail Prices Index (RPI) is one of the UK’s most important macroeconomic indicators, as well as being used for indexation/adjustments for inflation to wages and benefits. This paper argues that the dynamic changes in product markets and consumers’ responses to p ... More

Demographics and Pension Reforms in the Major Central and Eastern European Countries Demographics and Pension Reforms in the Major Central and Eastern European Countries
Dieter Bräuninger, World Economics, March 2003
Today in the Central and Eastern European (CEE) countries there are barely 30 pensioners for every 100 persons of working age. By 2050, the number could rise to almost 80 pensioners. So far Poland has responded the most rigorously to the challenge, establishing a mod ... More

How to Reform Europe’s Fiscal Policy Framework How to Reform Europe’s Fiscal Policy Framework
Lars Calmfors & Giancarlo Corsetti, World Economics, March 2003
The current budgetary problems of some EU member states have intensified the debate on Europe’s fiscal policy framework. It is not enough to change the interpretation of the Stability and Growth Pact. More fundamental revisions of the EU Treaty are needed in order to ... More

Some Lessons from a Single Currency Some Lessons from a Single Currency
Alan J. Brown, World Economics, March 2003
This article looks at the early experience of the Euro and argues that both the original rules established for the European Central Bank and the Stability and Growth pact need to be reconsidered. Failure to do so will result in the whole European economy delivering l ... More

Why The Five Economic Tests? Why The Five Economic Tests?: The decision about British membership of a single European currency in historical context
Ed Balls, World Economics, March 2003
Chief Economic Adviser to the Treasury, Ed Balls, sets out the government’s approach to making the decision about British membership of a single European currency in an historical context. The basis for deciding whether there is a clear and unambiguous economic case ... More

From Socialism to Capitalism and Democracy From Socialism to Capitalism and Democracy: János Kornai on the trials of socialism and transition
An interview with introduction by Brian Snowdon
World Economics, March 2003
János Kornai is generally regarded as the world’s leading scholar on socialist economic systems. In this interview, Professor Kornai discusses the evolution of his thinking on the political economy of the socialist system, its characteristics, reform, transition and ... More

Continuities and Discontinuities in Global Development Continuities and Discontinuities in Global Development: Lessons from new East/West comparisons
Kenneth Pomeranz , World Economics, December 2002
Much literature normalises a ‘North Atlantic’ pattern of development, and sees a regionally specific ‘East Asian’ path emerging relatively recently. However, development patterns in core regions of Europe and East Asia were surprisingly similar until almost 1800; Eur ... More

Ready to Join the EU? Ready to Join the EU?: On the status of reform in the candidate countries
Federico Foders, Daniel Piazolo & Rainer Schweickert, World Economics, December 2002
This paper presents a new set of indicators concerning the status of economic reform in the candidate countries for the enlargement of the European Union which is scheduled for 2004. After an overview of indicators of institutional development, macroeconomic policy a ... More

The UK’s Achievement of Economic Stability The UK’s Achievement of Economic Stability: How and why did it happen?
Tim Congdon, World Economics, December 2002
The UK achieved a remarkable degree of macro-economic stability in the 1990s. Contrary to expectations when the pound was expelled from the European exchange rate mechanism in September 1992, over the next ten years inflation was kept almost exactly on target and its ... More

The Quest for Stability The Quest for Stability
Alan Budd, World Economics, September 2002
The UK seems to be enjoying a golden age of macroeconomic policy-making. Growth is steady; inflation is low and stable, and unemployment is low. After years of trying to achieve economic stability we seem to have found the answer. This paper explores the history of p ... More

Slobodan Milosevic and the Fire of Nationalism Slobodan Milosevic and the Fire of Nationalism
Ronald Wintrobe, World Economics, September 2002
This paper is an economist’s attempt to understand the behaviour of dictators with special reference to the Milosevic regime in Serbia. The author focuses on nationalism, ethnic cleansing and war, especially the most recent war with NATO. The basic argument is simple ... More

Does the Eurozone Face 50 Years of Economic Stagnation? Does the Eurozone Face 50 Years of Economic Stagnation?
Tim Congdon, World Economics, June 2002
The newly-formed European currency will compete with the dollar to become the world’s leading currency in the 21st century. Its prospects in this competition will depend partly on the size of the European economy compared with the US economy. This article argues that u ... More

A Night at the Opera A Night at the Opera: Subsidies, prices and repertoire at London’s opera houses
Jeff Frank & Philip Wrigley, World Economics, September 2001
This paper considers how the behaviour of the two London opera houses differs from profit-maximisation, possibly in response to the high level of government funding and private donations. The opera houses put on more innovative and artistically rewarding operas than ... More

Russia’s Post-Communist Economy Russia’s Post-Communist Economy
Peter Oppenheimer & Brigitte Granville, World Economics, March 2001
Ten years after the break-up of the Soviet Union, Russia’s measured output was still showing a net decline of around 40 per cent – but with no comparable decline in average living standards, both because the output drop affected mainly the defence sectors and because R ... More

Eastern Enlargement and EU Labour Markets Eastern Enlargement and EU Labour Markets: Perceptions, challenges and opportunities
Tito Boeri & Herbert Brücker, World Economics, March 2001
This paper summarises the key findings of a recent study on the impact of Eastern Enlargement of the European Union (EU) on labour markets in the current Member States. The study focuses on three main channels along which enlargement may affect labour markets in the ... More

The Modern Motor Industry The Modern Motor Industry: Nowhere for the inefficient to hide
Garel Rhys, World Economics, March 2001
The motor industry is experiencing one of its periods of massive change. This involves considerable micro- and macroeconomic effects, reflecting the structure and behaviour of the industry and its scale of operations within an economy. The industry is a highly rivalr ... More

From Rags to Riches From Rags to Riches: Ireland’s economic boom
Brendan Walsh, World Economics, December 2000
This article explores the factors behind the Irish economic renaissance of the 1990s. These include the fiscal correction of the 1980s, the availability of an ample supply of well-educated labour, a competitive exchange rate, and the inflow of EU aid. The reintroducti ... More

Goods and Bads Goods and Bads
Ralph Turvey, World Economics, December 2000
There is a high degree of symmetry between economic goods and economic bads. Snow, litter and street mud are cited as examples. Economic growth obviously results in an increase in the supply of bads as well as goods. In addition, however, because it raises the value o ... More

Poles Apart Poles Apart: Labour market performance and the distribution of work across households
Paul Gregg, Kirstine Hansen & Jonathan Wadsworth, World Economics, June 2000
Analysis of labour market performance using individual level data can reach radically different conclusions to those provided by a household-based analysis, using the same source of information. In Britain and other OECD countries the number of households without access ... More

The Thirty-five Hour Working Week The Thirty-five Hour Working Week: Flexibilité, compétitivité, productivité-a French Revolution
Alan Kirman, World Economics, June 2000
The introduction of a reduced working week (RWW) in France has been widely condemned as an arbitrary additional constraint in an already rigid labour market. This article explores the origins of the law, and the reasons for the negative appreciation by economists of thi ... More

Welfare-to-work and the New Deal Welfare-to-work and the New Deal
Richard Layard, World Economics, June 2000
Welfare-to-work is on trial in many countries. In Britain it has become the
government’s most important policy for lowering unemployment and expanding
labour supply. But can it work? And what lessons does Britain’s experience
provide for other countries? ... More

Housing in the South East of England Housing in the South East of England: Some issues raised by the Government’s plans
David Miles, World Economics, June 2000
Plans recently unveiled by the UK government will, if implemented, generate a
major increase in new housebuilding in one of the most crowded and congested
parts of the UK. The plans fail to take account of the impact on people living in
London and the Sou ... More

Extending the UK National Accounts Extending the UK National Accounts: What can be done?
Amanda Rowlatt, World Economics, March 2000
The national accounts measure economic activity. The UK is developing "satellite accounts" which use the framework of the national accounts but aim to quantify other aspects of living standards. This article starts by comparing satellite accounts with the use of indic ... More

European Pension Reforms European Pension Reforms: A study by Merrill Lynch
Jan Mantel & David Bowers, World Economics, March 2000
Are the present pension systems in Europe substainable? Can the pensions time bomb caused by demographic changes be defused? This study describes developments in Europe, but the theory, the problems and the solutions are similar for most developed nations in the rest of ... More

Pension Reform in Germany Pension Reform in Germany: To fund or not to fund
Axel Börsch-Supan, World Economics, March 2000
German public retirement insurance is in many respects an extreme example of the typical European pay-as-you-go pension system because almost 85% of retirement income stems from this system and only 15% comes from private sources such as funded pensions, labour income, ... More

The Public/Private Mix in UK Pension Policy The Public/Private Mix in UK Pension Policy
Phil Agulnik & Nicholas Barr, World Economics, March 2000
The UK government aims to shift the balance between public (Pay-As-You-Go) and private (funded) pensions from 60:40 today to 40:60 by 2050 (UK DSS 1998). What is the economic rationale for this shift? Funding pensions may have a positive effect on economic growth and th ... More

Achieving the goals of UK Pension Reform Achieving the goals of UK Pension Reform
Frank Field, World Economics, March 2000
There is an inevitable tension between the aim of providing enough income in retirement for those genuinely unable to build up a sufficiently large fund of their own and the aim of preserving people’s incentives to save for their own retirement. The author argues that ... More