The Week That Was in Europe

We discuss about the current state of the Italian economy, structural reforms in Italy, and about Italy's position on the reform of the ESM reform & Stability and Growth Pact. Francesco Giavazzi is Professor of Economics at Bocconi University and was widely seen to be the most important economic advisor to former Prime Mario Draghi.

Europe needs to boost its growth potential - but how? We discuss with Professor Ludger Wößmann (University of Munich & ifo Institute), one of the most eminent researchers in education economics worldwide, about the role of human skills and schools in economic growth.

We discuss the main announcements and possible reasons for why the market wasn't buying them.

Policy rates have increased by 2,5% already since the summer of 2022, but how much more is needed to get Euro Area inflation back to 2%? We discuss: the inflationary situation in Europe, the main aspects of historical inflation surges, and simple calculations that provide a perspective on the required amount of tightening.

The Euro Area has faced one its most dramatic energy price shocks, is operating in an increasingly hostile international trade environment, and experienced a negative confidence shock following the Russian invasion in Ukraine. Yet, a recession has been avoided. We shed some light on why this is the case and what this means going forward.

The Inflation Reduction Act (IRA) has recently been signed into law by U.S. President Biden. We discuss its economic consequences for European industry and how the EU might have to respond to the IRA.

We review and discuss the important decisions taken by the ECB in its December 2022 monetary policy meeting.

We discuss about inflation, fiscal policy and labor markets in France and about the future of European fiscal rules.

We discuss with Alicia Garcia Herrero, Head of the Asian economic research platform of Natixis: (i) why the EU-China relationship has deteriorated, (ii) the Chinese perspective on this relationship, and (ii) how the relationship might develop going forward.

We discuss under what circumstances and how the aggregate price level responds to fiscal decisions. We highlight the conditions under which the so-called Fiscal Theory of the Price Level applies and to what extent the data supports this theory.