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Current issue

Volume 48 · issue 2 · March/April 2013

Contents

Forum

Convergence in the EU

With articles by Annette Bongardt, Francisco Torres, Carsten Hefeker, Pierre Wunsch, Christoph Hermann

Other articles

  • Richard S. J. Tol · Carbon Tax: Still the Best Way Forward for Climate Policy
  • Daniel Gros · Banking Union with a Sovereign Virus: The Self-serving Treatment of Sovereign Debt
  • Phedon Nicolaides · The Economics of Subsidies for R&D: Implications for Reform of EU State Aid Rules
  • Gunther Tichy · What Can Sector Accounts Tell About the Financial Crisis?
  • Andy Hira · Irrational Exuberance: An Evolutionary Perspective on the Underlying Causes of the Financial Crisis
  • Andrea Elekes, Péter Halmai · Growth Model of the New Member States: Challenges and Prospects
  • Daniel S. Hamermesh · President Obama and the Minimum Wage – A Politico-economic Bargain

Quote of the Month

Why do we typically expect Slovakia, Slovenia and the Baltic countries to converge towards core EU countries in terms of GDP per capita while we have got used to the fact that the Mezzogiorno is not converging towards Northern Italy?

from Pierre Wunsch's Forum contribution Is the European Integration Machine Broken?

In the current issue

Carbon Tax: Still the Best Way Forward for Climate Policy

by Richard S. J. Tol

The price of carbon dioxide emission permits in the EU Emissions Trading System (ETS) has fallen precipitously – from highs of €29 per tonne of CO2 in July 2008 to €4 per tonne of CO2 in March 2013. This has caused concern among environmentalists, which is peculiar. The emission targets are being met. The costs of compliance are low. We should rejoice. read

Convergence in the EU

by Annette Bongardt, Francisco Torres, Carsten Hefeker, Pierre Wunsch, Christoph Hermann

The EU has long viewed economic and institutional convergence as important goals, but the results thus far have been decidedly mixed, and there remain several open questions: How exactly should convergence be defined? How much convergence is necessary? What steps can be taken to improve convergence in the EU, and how can success be defined? Finally, how much convergence can be achieved by improving the economic performance in underperforming regions, and how can convergence in the form of harmonisation towards lower welfare levels be avoided? read

Banking Union with a Sovereign Virus: The Self-serving Treatment of Sovereign Debt

by Daniel Gros

Despite the experience of the ongoing sovereign debt crisis, European banks continue to hold large amounts of bonds from their home governments. This ties the fates of the sovereign and the banks together, leading to the disruptive self-reinforcing feedback loops that brought the euro area to the brink of collapse. This article addresses how banks can be weaned off of their massive investments in their home government’s bonds. read