Category Archives: General

New column on risk sharing across the US and Eurozone

Read Valentina Milano and Pietro Reichlin’s new column Risk sharing across the US and Eurozone: The role of public institutions (VoxEU, 23 January 2017).

Risk sharing across the Eurozone is well below the levels observed in other federations, including the US. This column argues that the US achieves more intensive risk sharing largely because of a more integrated financial market, and also that the contribution of public institutions to risk sharing is much higher in the Eurozone than in the US. The reason why the Eurozone needs more fiscal transfers to withstand idiosyncratic shocks is not because these institutions should do more to improve risk sharing, but because delegation of risk sharing to national governments threatens the stability of the currency union.


New deliverable by NIESR published: “The monetary and fiscal framework of the EMU in times of high debt and constrained interest rates”

A new deliverable by NIESR has been published: The monetary and fiscal framework of the EMU in times of high debt and constrained interest rates (D4.3).

Abstract: This paper looks at the monetary and fiscal interaction in the European Monetary Union and how the two arms of macrostabilisation policy are affected by high levels of sovereign debt and short-term interest rates at, or around, their lower bound. Using the National Institute’s Global Econometric Model it shows that when one arm of policy is constrained then the other must do more work to act as a partial, yet imperfect substitute. With both binding fiscal constraints and short-term interest rates near the lower bound, monetary intervention in sovereign debt markets offers a channel by which to ease the monetary stance and simultaneously relax the fiscal budget constraint. When only a subset of the monetary union is fiscally constrained, a domestic fiscal expansion by the remaining unconstrained members can provide a cross-country intra-union offset that makes all member states better off than they otherwise would be.



House of Lords committee report published

The House of Lords European Union Committee has produced a report on the Five Presidents’ Report. Iain Begg acted as a Specialist Adviser to the committee.

House of Lords (2016), ‘Whatever it takes’: the Five Presidents’ Report on completing Economic and Monetary Union. House of Lords European Union Committee, 13th Report of Session 2015–16, HL Paper 143. [Text] [Pdf]

House of Lords EU Select Committee


Also see:

House of Commons (2016), Implications of the referendum on EU membership for the UK’s role in the world. House of Commons Foreign Affairs Committee, Fifth Report of Session 2015–16, HC 545. [pdf]