Fiscal Implications of the ECB’s Bond-buying Program

by Paul De Grauwe and Yuemei Ji Voxeu.org published this article 14 June 2013 The monetary-fiscal policy connection is under scrutiny by the German Constitutional Court in the context of the ECB’s OMT bond-buying programme. This column argues that most analyses are deeply flawed by the misapplication of private-company default principles to the central bank. …

Panic-driven Austerity in the Eurozone and Its Implications

by Paul De Grauwe and Yuemei Ji, Voxeu.org Eurozone policy seems driven by market sentiment. This column argues that fear and panic led to excessive, and possibly self-defeating, austerity in the south while failing to induce offsetting stimulus in the north. The resulting deflation bias produced the double-dip recession and perhaps more dire consequences. As …