Category: European economy

Aviation policy ‘week’ this November

This year’s European Aviation Conference takes place at the University of St Gallen, Switzerland on 14 and 15 November. Programme, speakers, booking details and venue are at www.eac-conference.com.

Feedback after last year’s event indicated a greater preference for active debate, so almost the entire first day this year is devoted to a moderated discussion between ten invited advocates and critics of airport price regulation. And the 2013 Martin Kunz Memorial Lecture is to be given by the person credited with devising modern price cap regulation, Professor Stephen Littlechild.

HAC 2013 is preceded on Wednesday 13 November by a workshop of the German aviation research society (GARS); the call for papers is here: www.garsonline.de.

Unsated wonks can devote the entire week to aviation policy; IATA holds a two-day discussion on evaluating the economic effects of air transport on Monday and Tuesday 11-12 November in Geneva. Details on the GARS website given above.

New CEPR website

The CEPR has a new website accessible here.

Ireland’s (and Britain’s, and Italy’s…) long recession

Jeff Frankel has a terrific piece here on the unsatisfactory way in which recessions and recoveries are called in Europe.

The current European definition of a recession (two successive quarters of declining GDP) is particularly unsuitable in Ireland, given its dodgy and volatile GDP statistics — looking at a broader range of indicators over a longer period of time would surely make more sense here.

There is an additional cost to the two-quarter rule of thumb in the Irish and Eurozone context: it implies that Ireland is periodically proclaimed to be out of recession. This then allows Eurozone politicians and central bankers to defend the status quo monetary and fiscal policies prolonging the economic crisis in Ireland and elsewhere. (And to express “surprise” when Ireland tips into recession “again”, despite its model pupil status.)

Update: the CEPR’s Euro area business cycle dating committee does not use the “two-quarter GDP decline” rule of thumb. Details of their methodology are available here.

Du global au local

I dare say that readers of this blog do not all subscribe to “Le Petit Écho des Entremonts“, so here is an article I wrote for a forthcoming issue dedicated to the economy.

ECB Policy Responsibilities and Banking System Fragmentation

The Eurozone banking system is not working properly due to fragmentation between core and peripheral banking systems. In a recent speech, the president of the ECB, Mario Draghi, has acknowledged this, but argues that fixing this problem is someone else’s responsibility. The ECB has the tools to address this crucial flaw in the Eurozone system, and over the medium term horizon there is no other Eurozone institution that can. The ECB should use the tools available to fix this market fragmentation, in particular, the ECB should engage in aggressive, long-term asset refinancing on sufficiently generous terms to encourage bank participation.

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