Europe Economics Focus Key lessons from Sweden’s Covid response Sweden’s unique response to the pandemic means that it has acted as a control experiment for economists and epidemiologists alike. We suspect that its economy would have shrunk by an additional 3-4%... 12th August 2020 · 18 mins read
Europe Economics Focus Euro-zone unemployment will only peak in mid-2021 Euro-zone unemployment now seems likely to peak at a lower rate and about a year later than we had previously forecast, mainly due to the widespread use of short-time working schemes. But the partial... 9th July 2020 · 21 mins read
Global Economics Focus Lasting blow to supply capacity is not inevitable It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government... 29th June 2020 · 28 mins read
Europe Economics Focus Has the euro-zone done enough to avoid a debt crisis? The EU’s moves towards an unprecedented joint fiscal stimulus and the ECB’s commitment to buy unlimited amounts of government debt have greatly reduced the risk of a euro-zone debt crisis in the... 15th June 2020 · 23 mins read
Europe Economics Focus TARGET2 imbalances set to balloon TARGET2 imbalances are set to rise to record levels over the year ahead on the back of the ECB’s planned wave of asset purchases. While this may be dismissed by some as a benign and technical side... 11th June 2020 · 13 mins read
Europe Economics Focus Will government debt be sustainable after the crisis? Public debt ratios are set to rise sharply in all euro-zone countries this year but in most cases they should then start to fall again. The exceptions are Greece and, more importantly, Italy where we... 20th May 2020 · 13 mins read
Europe Economics Focus Euro-zone fiscal policy less effective than it once was Hopes for a substantial boost to economic growth in the euro-zone from fiscal policy in the next year or two are likely to be disappointed. It seems likely that any fiscal stimulus will be very small... 6th February 2020 · 15 mins read
Europe Economics Focus France labour market progress not due to reforms French President Emmanuel Macron’s emphasis on overhauling France’s ailing labour market is long overdue. But while there are signs that the changes are starting to take effect, the labour market... 17th December 2019 · 13 mins read
Nordic & Swiss Economics Focus The lessons from negative interest rates so far There is little evidence that negative interest rates have succeeded in boosting economic growth or inflation expectations. But equally, they do not seem to have done much harm either – many of the... 9th December 2019 · 14 mins read
Europe Economics Focus Are negative policy rates hurting EZ bank lending? In our view, claims that the ECB’s negative deposit rate is weighing heavily on bank lending in the euro-zone are wide of the mark. In fact, we suspect that policymakers will cut the deposit rate even... 19th November 2019 · 10 mins read
Europe Economics Focus How will the ECB change under Christine Lagarde? As part of its forthcoming review under Christine Lagarde, the ECB is likely to change its inflation target and make its voting system more transparent. Further ahead, it will have bigger issues to... 29th October 2019 · 26 mins read
Nordic & Swiss Economics Focus Switzerland’s 778 billion franc question The acquisition of reserve assets by the Swiss National Bank (SNB) has seen it take on a role more suited to fund managers than central bankers. Faced with the prospect of negative bond yields further... 21st August 2019 · 18 mins read
Europe Economics Focus Draghi to go out with a bang Recent comments by Mario Draghi suggest that the ECB will loosen policy sooner than we had anticipated. We now expect the Bank to strengthen its forward guidance in July and cut its deposit rate in... 26th June 2019 · 24 mins read
Europe Economics Focus Cyprus to outperform euro-zone, but risks remain Cyprus has now recovered from the economic crisis of 2012-13, which was caused primarily by its oversized banking sector. While a number of risks remain, notably the high level of non-performing loans... 20th June 2019 · 1 min read
Europe Economics Focus Why Italy cannot escape from its debt trap There is little that Italy’s government can do to prevent its debt ratio from rising. For a number of reasons, not least of which is its membership of the euro-zone, the three paths to debt reduction... 7th June 2019 · 1 min read
Nordic & Swiss Economics Focus SNB to cut interest rates further into negative territory If the ECB re-starts QE next year, as we think is likely, the resulting upward pressure on the Swiss franc would stoke deflationary fears at the Swiss National Bank (SNB) and prompt a policy response... 8th May 2019 · 1 min read
