Europe’s COVID-19 Crisis and the Fund’s Response

2020-03-31T10:41:36-04:00March 30, 2020|

This blog is part of a series providing regional analysis on the effects of the coronavirus.

By Poul M. Thomsen

عربي, 中文Español,  FrançaisItaliano, 日本語, Português, Русский

COVID-19 has struck Europe with stunning ferocity. While we do not know how long the crisis will last, we know that the economic impact will be severe. In Europe’s major economies, nonessential services closed by government decree account for about one-third of output. […]

A Call for Vigilance After a Strong Year for Risky Assets

2021-05-13T12:56:12-04:00January 28, 2020|

By Tobias Adrian and Fabio Natalucci

عربي, 中文, Español, Français

While we have seen some recent volatility, many risky asset markets around the world had a spectacular year in 2019. Equity market indices were up just over 30 percent in the United States, close to 25 percent in Europe and China, and over 15 percent in emerging markets and Japan. Emerging-market sovereign debt, U.S. high-yield debt, and emerging-market corporate debt all had returns in excess of 12 percent. Remarkably, the fourth quarter of 2019 was […]

Euro Area Inflation: Why Low For So Long?

2019-03-13T15:15:23-04:00August 28, 2018|

By Yasser Abdih, Li Lin, Anne-Charlotte Paret 

August 28, 2018

Sculpture of the euro outside the European Central Bank, Frankfurt, Germany: Convergence of core inflation towards the ECB’s medium-term objective is likely to be gradual (photo: Alex Domanski/REUTERS/Newscom)

The euro area economy is in its fifth year of recovery, unemployment is close to its pre-crisis level and the output gaps of most countries […]

The Euro Area Needs a Fiscal Union

2019-03-15T10:26:56-04:00February 21, 2018|

By Helge Berger, Giovanni Dell’Ariccia, and Maurice Obstfeld

February 21, 2018

Version in Français (French) 

Without more tangible elements of a fiscal union, the euro area will remain fundamentally vulnerable to shocks. (photo: iStock by GettyImages) .

The euro area is experiencing a robust recovery, but the architecture supporting Europe’s currency union remains incomplete and leaves the region vulnerable to future financial crises.

While substantial progress has been made […]

The ECB’s Negative Rate Policy Has Been Effective but Faces Limits

2019-03-26T16:33:44-04:00August 10, 2016|

By Andy Jobst and Huidan Lin

Versions in Français (French), and Español (Spanish)

More than two years ago, seeking to revive a moribund economy, the European Central Bank (ECB) embarked on a new monetary policy measure: charging interest on excess liquidity that banks held at the central bank. The move complemented a series of other easing measures aimed at bringing inflation back to the ECB’s price stability objective of below, but close to, two percent over the medium term. […]

The Broader View: The Positive Effects of Negative Nominal Interest Rates

2019-03-27T10:28:54-04:00April 10, 2016|

By Jose ViñalsSimon Gray, and Kelly Eckhold

Versions in: عربي (Arabic), Deutsch (German), 日本語 (Japanese), and Español (Spanish)

We support the introduction of negative policy rates by some central banks given the significant risks we see to the outlook for growth and inflation. Such bold policy action is unprecedented, and its effects over time will vary among countries. There have been negative real rates in a number of countries over time; it is negative nominal rates that are new. Our analysis takes a broad view of recent events to examine what is new, country experiences so far, the effectiveness […]

Go to Top