The macroeconomic effects of introducing a central bank digital currency
Central bank digital currencies are gaining traction as a potential innovation in central banking, with numerous countries considering their implementation. However, given the limited real-world
Climate change, firms, and aggregate productivity
Policy debates around climate change frequently focus on the trade-off between the near-term costs of reducing carbon emissions and the long-term benefits of mitigating climate
Households’ subjective expectations: Disagreement, common drivers, and reaction to aggregate shocks
Understanding how households interpret macroeconomic policy is vital to the effectiveness of central banks. This column demonstrates that the reactions of individual households frequently contradict
The value added tax paradox in resource-dependent economies
The introduction of value added taxes has been widely perceived as successful, boosting government revenue and stimulating industrialisation. This contrasts with the empirical finding that,
Keeping an eye on budgetary forecasts: The new Forecast Tracker of the Secretariat of the European Fiscal Board
Forecasts underpinning budgetary plans have a well-documented impact on fiscal performance especially when policymakers view the world through rosy lenses. Combined with inertia in the
Geopolitical risk in the euro area
Geopolitical risk is a key concern for the euro area, yet most available measures reflect a US perspective. This column introduces a new indicator of
Private safe asset supply and financial instability
Safe assets are financial instruments that maintain a stable value even after adverse macroeconomic shocks. This column explores how banks supply safe assets through securitisation
Tariffs across the supply chain
Tariffs disrupt trade flows and influence prices, but their broader impact depends on how they are structured and the type of goods targeted. This column
How the EU should plan for global trade transformation
The major turbulence being experienced by the world economy could lead to a global recession and the collapse of the norms and institutions that have
The trade imbalance network and currency fluctuations
In recent years, concerns over global financial fragmentation have grown amid rising geopolitical tensions. This column integrates a network structure in a multi-country model with
