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You searched for: Content Type Policy Brief Remove constraint Content Type: Policy Brief Publishing Institution Centre for European Policy Studies Remove constraint Publishing Institution: Centre for European Policy Studies Topic Economics Remove constraint Topic: Economics
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  • Author: Paul De Grauwe
  • Publication Date: 11-2008
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The paradigm that financial markets are efficient has provided the intellectual backbone for the deregulation of the banking sector since the 1980s, allowing universal banks to be fully involved in financial markets, and investment banks to become involved in traditional banking. There is now overwhelming evidence that financial markets are not efficient. Bubbles and crashes are an endemic feature of financial markets in capitalist countries. Thus, as a result of deregulation, the balance sheets of universal banks became fully exposed to these bubbles and crashes, undermining the stability of the banking system. The Basel approach to stabilise the banking system has as an implicit assumption that financial markets are efficient, allowing us to model the risks universal banks take and to compute the required capital ratios that will minimise this risk. I argue that this approach is unworkable because the risks that matter for universal banks are tail risks, associated with bubbles and crashes. These cannot be quantified. As a result, there is only one way out, and that is to return to narrow banking, a model that emerged after the previous large-scale banking crisis of the 1930s but that was discarded during the 1980s and 1990s under the influence of the efficient market paradigm.
  • Topic: Economics, Markets, Financial Crisis
  • Political Geography: Europe
  • Author: Hakim Darbouche
  • Publication Date: 03-2007
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: President Abdelaziz Bouteflika's statement to Spain's El País1 that the idea of a 'gas-OPEC' should not a priori be excluded, adds to a series of twists, among which was Vladimir Putin's confirmation on 1 February that the idea of a gas cartel was an 'interesting one' worth considering further. Hitherto, this gas saga featured Russia, Algeria, the EU, NATO and Iran. The story revolves around Russian-Algerian mingling on gas matters, spurring European and Transatlantic concerns over the prospects of a 'gas OPEC'. At a time of increasing European dependence on foreign energy supplies, these developments have been interpreted as being part of a wider effort, led by Russia, to use energy as a lever to undermine European diplomacy. These allegations have been dismissed by Algeria and Russia, whose leaders insist that their cooperation is intended to optimise their benefits and those of their customers alike. This paper examines the underpinnings of these developments by assessing the likelihood of their culmination in a gas cartel and offers an insight into the potential policy choices behind them.
  • Topic: Economics, Energy Policy
  • Political Geography: Russia, Europe, Eastern Europe, Asia, Algeria
  • Author: Ángel Ubide
  • Publication Date: 02-2007
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Globalisation is being blamed for the squeezing of the middle class and protectionism is being offered as a solution. We argue in this paper that the increase in inequality is a long-term trend resulting from a variety of factors, including the decline in manufacturing, the reduction in the progressivity of taxation and the steady increase in asset prices, and that globalisation has only had a marginal impact on it. Protectionism will not reverse any of these trends. We discuss some policy options aimed at cushioning this increase in inequality and argue that they will likely result in expanding fiscal deficits and pressure on central banks to test the limits of growth.
  • Topic: Demographics, Development, Economics, Globalization
  • Author: Hannu Piekkola
  • Publication Date: 03-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Regional disparities in the growth rates of GDP and total factor productivity (TFP) are a major policy concern in the European Union, not least because of the inclusion of new transition economies in the EU. The growth rate of a nation's TFP especially depends on its level of human capital rather than the increasing rate of human capital. The growth that is driven by innovation and the catching-up process spurred by technology imitation relies on educationbased human capital and related agglomeration. This explains why education provides a permanent advantage, which over time may increase in importance in the labour market.
  • Topic: Economics, Treaties and Agreements
  • Political Geography: Europe
  • Author: Irene Blanco, Arancha Simó, Consuelo Varela-Ortega
  • Publication Date: 06-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: This paper focuses on the comparative analysis and evaluation of the impact of multifunctionality on the agricultural sector for different scenarios that take into account the protection of the environment and natural resources as well as the international trade agreements in the context of the EU agricultural sector. The research focuses on two different regions in Spain that represent the continental agriculture of the region of Castilla-Leon in the northern central plateau and the Mediterranean fertile agriculture of Andalusia in the south. The analysis has been carried out based on mathematical programming models that simulate farmers' behaviour and their response to the different policy scenarios that correspond to the EU agricultural policies (CAP programmes) and water policies (Water Framework Directive) currently in place. Specifically, these scenarios are: full and partial decoupling, subsidy modulation, crop prices reduction, cross-compliance measures and water pricing policies. Results indicate that the new decoupled CAP will not lead to drastic changes in land use in the two regions studied but will have negative repercussions on farmers' income. Moreover, the introduction of additional measures, such as cross-compliance, will contribute substantially to improving and protecting the environment even though they amount to an additional cost for farmers. Reduction in crop prices will have significant effects on international trade and is likely to produce a reduction in farm intensification and hence a beneficial effect on the environment but will involve negative socio-economic impacts in marginal rain-fed farms. As regards the integration of agricultural and water conservation policies, the application of the EU Water Framework Directive in conjunction with the new CAP reform would produce different regionspecific effects and might question the viability of a number of irrigated farms in Spain.
  • Topic: Agriculture, Economics, Treaties and Agreements
  • Political Geography: Europe, Spain
  • Author: Kevin Hanrahan, Trevor Donnellan
  • Publication Date: 06-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The economic impact of trade policy reforms on various sectors of the economy receives more attention than the effects on the environment. This may be partly owing to the secondary importance attributed to environmental or multifunctionality issues when economic consequences take centre stage. An additional consideration, however, may be the practical difficulties of bringing together models that examine the economic impact of trade policy reforms and models that can measure environmental or multifunctionality indicators.
  • Topic: Economics, Politics, Treaties and Agreements
  • Political Geography: Europe, Ireland
  • Author: Karel Lannoo
  • Publication Date: 06-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Much has been achieved in upgrading and integrating the 'governance' of the European financial system in recent years. In parallel with the successful adoption of the Financial Services Action Plan (FSAP), the EU managed to reform its regulatory structure, extending what was proposed by the Lamfalussy Committee for securities markets in early 2001 to banking and insurance. The EU thus created permanent committees of securities, banking and insurance supervisors (the 'Level 3 Committees' – CESR, CEBS and CEIOPS). This rapid reform demonstrated that national authorities were capable of overcoming domestic biases, adapting the supervisory structure, and instituting a much greater degree of supervisory cooperation than had existed previously.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Europe
  • Author: Stefano Micossi
  • Publication Date: 04-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: In the spring of 2004, the European Commission approved a draft Directive on Services in the Internal Market and sent it to the Council and the European Parliament. The proposal is the cornerstone of the ailing Lisbon strategy to revive growth and jobs in the European Union: services account for 70% of GDP and employment in advanced countries, and their performance is a main determinant of overall productivity and employment growth. In the European Union, the markets for services are still organised along national lines, cross border trade remains relatively underdeveloped and competition is scarce. The productivity gap with the United States is largely explained by these obstacles.
  • Topic: Economics, International Cooperation, Regional Cooperation
  • Political Geography: United States, Europe, Lisbon
  • Author: Christian Egenhofer, Joe Kruger
  • Publication Date: 04-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Emissions trading is a market-based mechanism designed to allow firms to choose the most cost effective strategy to meet environmental standards. The success of SO2 and NOx emissions trading systems in the United States and the launch of the ambitious European Union Emissions Trading System (EU ETS) underscore the value of emissions trading as a tool for environmental policy.
  • Topic: Economics, Environment, International Cooperation
  • Political Geography: United States, Europe
  • Author: Paul J. G. Tang, Richard Nahuis
  • Publication Date: 02-2006
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The Kyoto Protocol binds the level of greenhouse gas emissions in participating countries. It does, however, not dictate how the countries are to achieve this level. The economic costs of reaching emission targets are generally evaluated to be low. For example, evaluations with applied general-equilibrium models estimate the costs to be in the range of 0.2% to 0.5% of GDP, when international trade in emissions rights among governments is allowed for. We argue that important costs are overlooked since governments are inclined to choose highly distorting tax schemes.
  • Topic: Economics, Environment, Treaties and Agreements
  • Political Geography: Europe