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24 posts on "Euro Area"

April 11, 2012

The European Growth Outlook and Its Risks

Joshua Abel,* Robert Rich, and Joseph Tracy

As Europe continued to struggle with its sovereign debt crisis during the past two years, significant concerns about the growth outlook for European Union members began to emerge in late 2011. In response, the European Central Bank (ECB) and European authorities carried out a series of important policy initiatives. In this post, we use growth forecasts from an ECB survey to document the deterioration in the growth outlook and note parallels to late 2008—when Europe was in a deep recession. We also discuss how the next survey scheduled for release in May can be used to gauge whether recent policy actions have improved the growth outlook and reduced the uncertainty surrounding it.

Continue reading "The European Growth Outlook and Its Risks" »

December 21, 2011

Central Bank Imbalances in the Euro Area

Matthew Higgins* and Thomas Klitgaard

The euro area sovereign debt crisis sparked an outflow of bank deposits from countries in the periphery to commercial banks in Germany and other core countries. The outflow highlighted a key aspect of the payments system linking national central banks in euro area countries. In particular, net outflows from private commercial banks in a given country are matched by credits to that county’s central bank, with those credits extended by central banks elsewhere in the euro area. In this post, we explain how the credits affected the adjustment pressures faced by countries in the euro area during the ongoing debt crisis.

Continue reading "Central Bank Imbalances in the Euro Area" »

July 18, 2011

Which Firms Have Flexible Prices?

Rebecca Hellerstein and Pinelopi Goldberg*

Since the 1930s, the conventional wisdom among economists has held that producer prices are more rigid than consumer prices. The roots of this view lie in the 1930s-era “administered price” thesis, which states that large firms set their prices more rigidly than do small firms. In this post, we report that this old “fact” is not true. We instead find that the prices set by large firms are much more flexible than those set by small firms. A key implication of this finding is that policymakers concerned about inflation or deflation should pay particular attention to changes in large firms’ prices.

Continue reading "Which Firms Have Flexible Prices?" »

Posted by Blog Author at 10:00 AM in Euro Area, Inflation, Macroecon | Permalink | Comments (0)

May 31, 2011

Did Unconventional Policy Responses to the Crisis Work? Evidence from a Cross-Country Analysis

Carlos Carvalho, Stefano Eusepi, and Christian Grisse

The 2008-09 global recession produced a significant loss of output and a deflationary scare in many countries. The depth, scale, and duration of the crisis triggered monetary and fiscal policy actions that were “unconventional” in terms of their size and scope, leading to an ongoing debate over the role that these policy responses played in the stabilization process. How and to what extent were these policies effective? In this post, we examine cross-country experiences and find evidence consistent with the idea that the policies contributed to the stabilization process through their effect on expectations of output and inflation.

Continue reading "Did Unconventional Policy Responses to the Crisis Work? Evidence from a Cross-Country Analysis" »

Posted by Blog Author at 10:00 AM in Euro Area, Expectations, Inflation, Macroecon, Monetary Policy | Permalink | Comments (0)
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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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