Are buybacks an efficient way to reduce sovereign debt?

Matthew N Luzzetti, Lee E. Ohanian, 31 January 2011This month marks the 75th anniversary of the publication of Keynes’s The General Theory of Employment, Interest, and Money. This column examines the book’s influence today. It argues that the General Theory was a flawed idea whose time had come.Full Article: Macroeconomic paradigm shifts and Keynes’s General Theory

Giovanni Dell'Ariccia, Rishi Goyal, Petya Koeva-Brooks, Thierry Tressel, 5 April 2013The Cyprus debacle highlights the need for, and difficulties with, a Eurozone banking union. This column argues that, to make a union, you need three crucial ingredients: common regulation, common restitution and common insurance. The power to control and the resources to rescue must work in parallel.

Alfonso Arpaia, Alessandro Turrini, 2 March 2013Is policy-related uncertainty at the root of lacklustre Eurozone job creation? This column presents evidence that is consistent with this idea. The main implications for policy are straightforward: credible solutions to the Eurozone debt crisis will alleviate the critical unemployment situation of a number of Eurozone countries. How?

Roger E. A. Farmer , 22 January 2013The efficient market hypothesis – in various forms – is at the heart of modern finance and macroeconomics. This column argues that market efficiency is extremely unlikely even without frictions or irrationality. Why? Because there are multiple equilibria, only one of which is Pareto efficient. For all other equilibria, the whims of market participants cause the welfare of the young to vary substantially in a way they would prefer to avoid, if given the choice.

Richard Baldwin, Charles Wyplosz, 22 February 2010Martin Feldstein suggested last week that Greece take a “holiday” from the Eurozone, rejoining with a depreciated nominal exchange rate. This column argues that the idea is not just impractical, it’s dangerous for the Eurozone. Full Article: How to destroy the Eurozone: Feldstein’s euro-holiday idea

Jakob de Haan, Mark Mink, 23 February 2012Since 2010, Eurozone countries have engaged in unprecedented rescue operations to avoid contagion from a potential Greek sovereign default. This column argues that news about Greek public finances does not affect Eurozone bank stock prices, while news about a Greek bailout does.

Paul De Grauwe, 4 October 2010The European Commission has just presented its proposals to strengthen the Stability and Growth Pact. This column argues it is a very bad idea as it is based on a wrong diagnosis of the causes of the debt crisis in the Eurozone and because there cannot be taxation without representation. It suggests reforms should not only focus on the responsibilities of national governments but also on those of the ECB. Full Article: Why a tougher Stability and Growth Pact is a bad idea

Helmut Reisen, 19 May 2010Credit rating agencies have recently downgraded Greek, Portuguese, and Spanish sovereign debt, causing unrest among Europe’s leaders. This column argues that unless sovereign ratings can be turned into proper early warning systems, they will continue to increase instability and volatility and to undermine the benefits of capital markets.