The Week That Was in Europe

We discusss the main channels through which Euro Area monetary policy generates income inequality in the cross-section of households and their quantitative importance. We also discuss why the ECB should care about inequality implications of its policies and whether the current rate increases generate effects that are symmetric to the effects generates by the rate cuts during Mario Draghi's ECB presidency.

We review the main decisions taken at the ECB's May 2023 Governing Council meeting & discuss the outlook for policy rates going forward.

We discuss what one can learn from the ongoing contraction in Euro Area money growth for output growth and inflation going forward. We discuss the various interpretations of the quantity theory of money and then analyze to what extent the resulting implications are born out by the data.

We discuss with the Global Head of Short-Term Liquidity Management of Groupe BPCE, the second-largest cooperative banking group in France, about liquidity managment & regulation, recent banking sector stress and the ECB's approach to liquidity provision.

We discuss whether recent stress in the banking sector will adversely affect Euro Area economic growth. We look at the latest indicators, their pandemic dislocations and academic research on the importance of financial shocks for business cycles (Jermann & Quadrini, Macroeconomic Effects of Financial Shocks, American Economic Review, https://www.aeaweb.org/articles?id=10.1257/aer.102.1.238 )

We discuss with Ignazio Angeloni about the state of banking supervision in the Euro Area. What kind of information do supervisors have access to and how do they use it? Ignazio Angeloni is a former member of the ECB's Supervisory Board. He coordinated the establishment of the so-called Single Supervisory Mechanism (SSM) at the ECB.

We review the main ECB decisions and the challenges that lie ahead in terms of inflation and financial stability.

The international trade order established by the World Trade Organization seems to be falling apart. We discuss with Harald Fadinger from the University of Mannheim about the reasons behind this development and how Europe should react to it.

We critically review the fiscal situation in Europe and the key elements of the fiscal reform proposal put forward by the European Commission.

We discuss how the Euro Area construction sector will perform given the record speed at which interest rates have been increasing. Can it derail the Euro Area economic recovery?