As flagged by Paul Krugman, P O’Neill writes on the Irish situation at A Fistful of Euros: you can read it here. [Unlike some others on this site, this economist picks his user name from a long Irish tradition, rather than relying on The Wire or former communist regimes for inspiration!]
Author: Philip Lane
Patrick Honohan is interviewed by Ambrose Evans-Pritchard here. Warning: the article uses AIB as an acronym for Anglo-Irish Bank.
In this new paper, I argue that the current crisis calls for a re-assessment of the optimal conduct of macroeconomic policies during non-crisis normal times. In particular, the risk and costs of crises can be mitigated by macroeconomic policies that lean against the wind in the face of cyclical, sectoral and external shocks. In this paper, I discuss the challenges involved in deploying fiscal policy in pursuit of a broad definition of macroeconomic stabilisation. The main policy conclusion is that pro-stabilisation fiscal policies are likely to be more effective if fiscal policy is determined under a formal fiscal framework that combines a set of fiscal rules and a substantive role for an independent fiscal policy council. (Forthcoming in Nordic Economic Policy Review.)
In this new paper (joint with Gian Maria Milesi-Ferretti of the IMF), we empirically examine the factors explaining the cross-country variation in the severity of the global crisis. We find that the pre-crisis level of income per capita, increases in the ratio of private credit to GDP, current account deficits, and openness to trade are helpful in understanding the intensity of the crisis. International financial integration did little to shield domestic demand from the country-specific component of output declines, while those countries with large pre-crisis current account deficits saw domestic demand fall by much more than domestic output during the crisis. (Forthcoming in IMF Economic Review.)
The IMF/EC/ECB mission has released its updated view on the implementation of the Greek adjustment package: you can read it here .