Economy & Markets

Edited by Donato Masciandaro and Gianmarco Ottaviano

2019-10-09 Donato Masciandaro

The Report Cards for Draghi and the Euro

With the change at the helm of the European Central Bank (ECB) from Mario Draghi to Christine Lagarde, can we try to issue grades on the relationship between monetary policy, the euro, and the Italian economy? Such an exercise is a subject to be handled very prudently. In fact, no direct relationship exists between monetary instruments and the relevant macroeconomic effects. Rather, there is a chain of relationships, of which monetary policy can be one of the first links, while macroeconomic results are the last link. The challenge for a central banker is to understand under what conditions the ...

2019-09-24 Gianmarco Ottaviano

The Tariff War

“When a country like the United States is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.” These were the words with which U.S. President Donald Trump announced the “trade war” (with the imposition of tariffs) between the United States and the rest of the world on March 2, 2018, on Twitter. The reference was to the deficit between American exports and imports, that in absolute terms has never been less than 400 billion dollars in the past decade, and in 2018, touched the record level of 600 billion. This ...

2019-08-28 Donato Masciandaro

Libra Glitters But Is Not Gold

Not all that glitters is gold. The old popular maxim provides the first comment that can be offered in response to Facebook’s announcement that it wants to issue its own digital currency, called Libra. If we assess the announcement from the standpoint of collective well-being, we must ask if this innovation meets the requirements that a currency must have to improve the allocation of goods and services. The response, based on the information available, is negative. The announcement that there could be a new currency in circulation spontaneously begs the question: do we need it? In order to answer, ...

EU beni pubblici
2019-07-03 Gianmarco Ottaviano

Public Goods Need Europe

There are at least three wrong ideas that need to be cleared up to begin a constructive debate on the role of the European Union at this point in history. The first is that the important decisions in the EU are made in Brussels without any involvement of the Member States. The second is that the decisions made in Brussels have no democratic basis since they are made by bureaucrats not elected by the people. And the third is that there are no truly “European” decisions that Member States should make together with Brussels. The fundamental purpose of the European Union is to allow the governments ...

2019-06-11 Donato Masciandaro

Illegal Capital Flows, Europe's Holes

The case of Danske Bank, the largest bank in Denmark, was the sixth time in just a few months that a bank belonging to a Member State of the European Union was implicated in the laundering of dirty money: Estonia, Germany, Holland, Latvia, Lithuania, and Malta, strictly in alphabetical order. And that’s not all: in January, the European Commission issued its first recommendation on the so-called “gold visas,” the practice by which certain EU countries such as Malta, Cyprus, and Bulgaria grant citizenship to non-EU citizens in exchange for financial investments. These “gold visas” can ...