The European Commission has just called for a fiscal stance that is more supportive of the recovery and of monetary policy in the Eurozone. This column argues that the case is strong for spending now on investment and other targeted programmes supporting growth and employment. However, fiscal space is heterogeneously distributed across the Eurozone, with some countries able to exploit a clear margin, and others needing to pursue a more prudent approach of gradual debt unwinding. A common stabilisation capacity would help for managing shocks that cannot be absorbed by national stabilisers alone.
The ‘gig economy’ refers to the independent workforce, including those drawing income from new digital platforms such as Uber and Airbnb. This column uses a survey of 8,000 respondents in the US, the UK, Germany, Sweden, France, and Spain to explode some myths about this relatively new and controversial side of the economy. Among the findings are that existing statistics severely underestimate the size of the gig economy, and that 30% of those working independently do not do so out of choice.
With growth still weaker than is desirable and challenges originating from geopolitical developments further complicating the economic outlook, responsible growth-friendly fiscal policy needs to play a bigger role in supporting demand in the Eurozone today. This column presents a new European Commission Communication on Eurozone fiscal policy, which outlines what a “positive fiscal stance" for the Eurozone would look like.
Recent studies on intergenerational income mobility have looked beyond the two-generational model to the role of grandparents, but multigenerational patterns in the wealth distribution have received less attention. This column uses a Swedish four-generational wealth dataset to study the role of family background for people’s wealth status and how much of this that is due to material inheritance. Most of the transmission in wealth status between generations comes from parents in the form of bequests and gifts, with only a marginal contribution from grandparents.
The Global Crisis of 2008 highlighted the role of intertwined financial markets in shaping the transmission of risk and the build-up of fragility throughout the system. This column investigates the role of dealer networks in the corporate bond market. Network relationships appear to act as a buffer in periods of distress, but also accentuate systemic fragility as connections with vulnerable dealers might affect trading outcomes even for sound dealers.
Other Recent Columns:
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- ‘Winning the peace’: The challenge for the G20
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- Agglomeration economies, productivity, and quality upgrading
- Selected takeaways from the ECB Sintra Forum on “The Future of the International Monetary and Financial Architecture”
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- Dilemmas and tradeoffs in global capital flows
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