Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Answer:
Joint borrowing by member states (e.g. Coronabonds)
Confidence level:
Extremely confident
Comment:
I am surprized the ESM is not mentioned. Already exists, so no instituional or legislateive initiative needed, has € 540 billion headroom and can eaily be expanded as needed. Was created after the Greek crisis but still exists for exactly this type of sudden Europe wide problems requiring Europe level intervention.
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Answer:
5-10% of GDP
Confidence level:
Confident
Comment:
And more if needed to avoid a US style collapse in employment.
Low interest rates have encouraged banks to leverage up which in turn is leading to more demand by banks for risky assets, so yes QE is both encouraging banks to leverage up and is feeding a stockmarket rally.
In particular German banks are loaded up with german debt to the extent of almost 3 times their capital value; these holdings will crash when interest rates rise. LT interest rates going back up to 4% would trigger a 30% price drop on German banks'average 7 year maturity debt holdings. This would wipe out all capital of the entire german banking system. Yes that is a systemic risk.
Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
The Eurozone COVID-19 Crisis: EU Policy Options
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Global risks from rising debt and asset prices
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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?
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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?
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Happiness and well-being as objectives of macro policy
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Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?
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