CEPR - Centre for Economic Policy Research

On 15 December 2024, Mario Draghi delivered an important address at a dinner, held alongside the 3rd CEPR Paris Symposium. The speech has now been published as CEPR Policy Insight 137: Europe: Back to Domestic Growth, shedding light on Europe's economic challenges and the reforms needed to revive its competitiveness and growth trajectory. Visit 🔗https://lnkd.in/eUuQ-Fkc to download the full speech. Here are some of its takeaways: 1️⃣ Revitalising Domestic Demand Europe’s reliance on external demand and low wages is no longer sustainable. Draghi underscores the need to pivot towards strengthening domestic demand through increased public and private investment, particularly in innovation-driven sectors like technology. He links high demand pressure to productivity growth by fostering procyclical R&D and innovation. 2️⃣ Completing the Single Market Fragmentation within the EU’s single market significantly constrains economic potential. Internal barriers act as implicit tariffs, limiting productivity and trade opportunities. Reducing these barriers to US levels could boost EU productivity by up to 7% within seven years. 3️⃣ Integrating Capital Markets Europe’s bank-based financial system is ill-suited to support young, innovative firms that often require flexible and high-risk financing. With venture capital and underdeveloped institutional investors favouring US markets, reforms are needed to attract funding. These include fostering innovation, easing equity financing, and issuing EU debt jointly to create additional fiscal space that could be used to limit periods of below-potential growth. By making the case for rethinking both fiscal policies and structural reforms, Draghi has reignited the conversation about Europe’s future growth strategy. #DraghiReport #Policy #Europe #EU #EconomicGrowth #Innovation #Competitiveness #Economics #CEPRParis2024

⚠️The recent rise of populist movements in Western democracies has accompanied an erosion of trust in institutions and expertise. ⭐This column examines the dynamic between traditional policymaking – characterised by complex compromise – and the rise, persistence, and recurrence of #populism, which tends to encourage extreme and simplistic policies without solid evidence. 🔄The link between distrust and ‘alt-truth’ engenders a trap whereby trust in the traditional political class never recovers, leading to a recurrence of populists in power. 💡Surprisingly, this cycle sometimes benefits voters by having a disciplining effect on traditional politicians. Vox column by: Helios Herrera (University of Warwick), Federico Trombetta (Università Cattolica del Sacro Cuore) Read more here: https://ow.ly/ZqqW50UtVye

🌡️High temperature shocks create monetary policy trade-offs. ⭐This column uses a new monthly data set to study how 14 European central banks have responded to abnormally high temperatures in a centennial perspective (1920-2019). 📉High temperature shocks are negative supply shocks to which central banks have reacted by lowering their interest rates. 🔄The macroeconomic impact of individual high temperature shocks on #inflation has diminished over time, but the size and the frequency of such shocks has increased. Vox column by: Jules Baleyte (Direction générale du Trésor (French Treasury), Insee), Guillaume Bazot (Université Paris 8), Eric Monnet (Paris School of Economics, EHESS - Ecole des Hautes Etudes en Sciences Sociales), Matthias Morys (University of York) Read more here: https://ow.ly/QgSW50UtaEp

💰Chinese lending to African countries has surged over the past 15 years, primarily aimed at financing infrastructure projects. ⭐This column shows that by lowering trade costs, Chinese infrastructure loans are linked to increased participation in global value chains, particularly in downstream sectors. 📈As a result, Chinese lending may contribute to export growth and enhanced #productivity in African countries. Vox column by: Vito Amendolagine (Università degli Studi di Foggia), Andrea Presbitero (International Monetary Fund), Roberta Rabellotti (Università di Pavia) Read more here: https://ow.ly/CB3f50UtVtH

After ending yesterday with a cocktail dînatoire at the Ministère des Affaires étrangères français in the beautiful Quai d’Orsay, hosted by Minister Jean-Noël Barrot, CEPR fellow, the final day of the CEPR Paris Symposium 2024 featured sessions on Industrial Organization, Economic History and Labour, Organisational, Public Economics, Inequality and Firms sparking rich debate on pressing economic and policy challenges. 🎤 Key Discussion of the Day: As a part of our Reducing Conflict and Improving Performance in the Economy (ReCIPE) research project, today a panel on Investing in Peace: How Economics Can Reduce Armed Conflict was chaired by Oliver Vanden Eynde (Paris School of Economics). Speakers included Michele Maio (Sapienza Università di Roma), Hannes Mueller (Barcelona School of Economics, Instituto de Analisis Economico (IAE-CSIC)), and Sarah Spencer-Bernard (OECD - OCDE) who talked economics and conflict. The discussion concluded that economics needs more focus on conflict, especially with regards to the macroeconomic impacts of conflict and how economies adjust to it. Visit https://recipe.cepr.org/ to find out more about ReCIPE. 🎓 Poster Sessions: Here are the young scholars presenting their research on economic history, industrial organization, competition policy and public economics: Joseph Enguehard (École normale supérieure de Lyon), Eva Davoine (University of California, Berkeley) Ningxi Liu (King's College London), Costanza Cincotta (Norwegian School of Economics (NHH)), Regi Kusumaatmadja (Vrije Universiteit Amsterdam (VU Amsterdam), Tinbergen Institute), and Kevin Parra Ramirez (Banque de France, Conseil d'analyse économique (CAE)). A heartfelt thank you to Sciences Po and Banque de France for hosting us throughout this week-long event and to all speakers, panellists, and attendees for the insightful discussions and inspiring connections made at CEPR Paris Symposium 2024! #Economics #Policy #Research #YoungResearchers #IndustrialOrganization #EconomicHistory #CEPRParis2024 #Conflict #Peace

During this year’s CEPR Paris Symposium, we had the privilege of recognising three exceptional individuals whose contributions to economics and policymaking have been truly outstanding: 🏅 Francesco Giavazzi – Lifetime Service to the Profession Francesco has been a pillar of CEPR since 1985, serving as one of its first Research Fellows and contributing nearly 50 CEPR Discussion Papers. His distinguished career spans academia, economic policymaking, and institution building, making him a cornerstone of the international economics community. 🏅 Isabel Schnabel – 2024 Prize for Service to Economic Policymaking A Member of the Executive Board of the European Central Bank, Isabel's prolific academic work and dedication to bridging research with policymaking have made a lasting impact. Her keynote address at the symposium, “Navigating Towards Neutral,” underscored the critical juncture monetary policy faces today, emphasizing gradual, data-driven approaches to maintaining economic stability. 🏅 Tessa Ogden – Special Service to the Profession As CEPR’s CEO, Tessa has led the organisation with exemplary vision and dedication, steering CEPR through a period of transformative growth, including the establishment of our Paris office. Her tireless efforts have significantly enhanced CEPR’s reach and impact. We extend our sincere congratulations to Francesco, Isabel, and Tessa for these well-deserved accolades. Their commitment and achievements inspire the entire CEPR community and beyond. To learn more about their achievements, visit https://lnkd.in/eAkFCYmi #Economics #Awards #Policy #Research #CEPRParis2024

☢️In 2017 #China banned the import of plastic waste, which led to large reallocations of plastic waste between countries. ⭐This column discusses the lessons that can be drawn for the planned #EU reform of the EU Waste Shipments Regulation. 🚚While the overall trade of waste within #Europe did not increase as a result of the ban, there is strong evidence for a ‘waste haven’ effect in disposal. ♻️Harmonisation of regulations within Europe could help to reduce outsourcing to low-regulation countries, while a mandatory content requirement for recycled material could address the concern that bans might increase waste disposal relative to recycling. Vox column by: Konstantin Sommer (Centraal Planbureau) Read more here: https://ow.ly/WWFP50Utajk

Estimates of China’s #military spending relative to the US vary widely from around one quarter of #US spending to near parity. ⭐This column argues that the use of appropriate relative prices and unbiased economic measurement techniques greatly reduces the range of reasonable estimates. Given current data, China’s military expenditure in PPP terms is estimated to be $541 billion, or 59% of US spending, and its equipment levels are only 42% of US levels. Comparing trends over time shows that the US has matched #China in recent years, albeit at the cost of a much higher defence burden. Vox column by: Peter Robertson (The University of Western Australia) Read more here: https://ow.ly/3r0m50UsqoJ

I am very honoured to have been awarded the “2024 Prize for Service to Economic Policymaking” by the CEPR - Centre for Economic Policy Research at the #ParisSymposium. A warm thanks to the CEPR, and to Beatrice Weder di Mauro in particular, for selecting me - this is a great motivation for continuing my work. A special thanks to my advisors Johannes Gräb & Tobias Sebastian Blattner at the European Central Bank without whom this would not have been possible.

As Direcor general of the Treasury and Chair of the Paris Club, I was glad to be at the Banque de France at #CEPR Paris Symposium 2024 yesterday to discuss the role of the Paris Club in a complex debt environment for Low income and Emerging market economies. This roundtable gathered Ugo Panizza, Barry Eichengreen, Pablo Hernández de Cos, Carmen Reinhart and Debora Revoltella. I took this opportunity to describe the debt vulnerabilities experienced by some countries in Africa and the results the Paris Club achieved with Emerging creditors via the Common Framework to provide debt restructuring to Zambia and Ghana. The Common Framework is an effective tool, but we need to improve it by achieving quicker restructuring processes and enhanced communication towards the debtors and the private creditors, as agreed in the G20.    **   En tant que directeur général du Trésor et Président du Club de Paris, j'ai été heureux de participer au #CEPR Paris Symposium 2024 à la Banque de France hier. J’ai évoqué le rôle du Club de Paris dans un environnement complexe pour la dette des économies à faible revenu et les marchés émergents. Cette table ronde réunissait Ugo Panizza, Barry Eichengreen, Pablo Hernández de Cos, Carmen Reinhart et Debora Revoltella. J'ai profité de cette occasion pour décrire les vulnérabilités de la dette de certains pays d'Afrique et les résultats obtenus par le Club de Paris avec les créanciers émergents via le cadre commun pour restructurer la dette de la Zambie et du Ghana. Le cadre commun est un outil efficace, mais nous devons en améliorer certains aspects pour parvenir à des processus de restructuration plus rapides et une communication renforcée avec les pays endettés et les créanciers privés, comme convenu au sein du G20. CEPR - Centre for Economic Policy Research Paris Club Secretariat