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Trade Policy: The European Response to a Challenging World Trade Regime

It only takes a quick glance at today's headlines to see that the world trade regime is changing rapidly. Due in large part to the "America First" policy of the current US administration, the last 18 months have borne witness to what some fear may erupt into a full-blown global trade war between the US and much of the rest of the world. The EU can take a leading role in reshaping the WTO and preserving the multilateral system if it responds to unprovoked aggression swiftly and resolutely. Given its firm belief in multilateralism as well as its commitment to social and environmental standards, the EU must insist upon the preservation of a rules and value-based system. Read what Annette Bongardt, Francisco Torres, Bernd Hoekman, Simon J. Evenett, Gabriel Felbermayr, Maria Demertzis, Gustav Fredriksson and Jacques Pelkmans are suggesting as a European response to a challenging world trade regime.

Brexit #1

Who will pay for Brexit?

Today we are one day closer to a No-Deal-Brexit than yesterday; and the deadline is approaching fast. M. Hüther, M. Diermeier, M. Jung & A. Bassilakis assess who is going to pay the bill, if no agreement is reached. Read the article on the cost of a "Hard Brexit".

Figure of the Month

The EU-US bilateral current account balance

This figure from Gabriel Felbermayr's article Dealing with Donald Trump shows that the American bilateral deficit in goods trade of 153 billion USD is more than compensated by a surplus in services trade of 51 billion USD and in investment income of 106 billion USD.

Euro

The Unifying Role of the Single Currency

Perhaps the single most tangible symbol of the European Union is its single currency, the euro, writes László Andor. Within the European Economic and Monetary Union, it was seen as a tool to ensure that European integration would be truly irreversible. As we have seen since the recent financial crisis, this is not always the case. Can the euro uphold its unifying mission or are the odds stacked against it?

Editor's Choice

Towards a New Paradigm: Stabilising Financial Markets

Ten years after the crisis, Moritz Schularick and Kaspar Zimmermann argue that a new paradigm to stabilise financial markets is emerging. This paradigm takes a less axiomatic perspective on market efficiency and acknowledges the potential of unfettered financial markets to misprice assets and endogenously create financial instability.

Intereconomics / CEPS Conference, 9 October 2018

Economic Convergence or Divergence in the EU?

How do we spot the trends in convergence and how can they help us to understand and stimulate the process? What roles do education, structural funds and regional factors play in this process? What policy measures can the EU use to foster economic convergence and deter divergence in the coming decade? Thanks for a great conference! Hope you enjoyed it as much as we did.

Details of the conference

Brexit #2

Brexit and Financial Market Stability

Paul Welfens analyses in our current issue what financial market effects are to be expected from Brexit. Since the City of London is one of the key players in financial services, a smart and swift response by the regulatory bodies of the EU is crucial to ensure financial market stability beyond March 2019.

Quote of the Month

The Nordic Model and Structural Change

"The case of Saab and Trollhättan shows one way that societies can harness the productive side of creative destruction while mitigating the harm it causes."

Mark T. Nance and Jack Daly from "The Nordic Model and Structural Change: Lessons from the Collapse of Saab Automobile AB"

The Nordic Model

Elitism in Higher Education and Inequality: Why Are the Nordic Countries So Special?

Do high levels of ‘elitism’ in higher education mean higher levels of inequality? Elise S. Brezis finds that elite universities have higher budgets, better scholars and a better student Network, resulting in higher productivity in the more competitive tradable sector´ and overall higher levels of inequality. Brezis considers the Nordic model, which displays lower elitism in higher education and correspondingly lower levels of inequality than most of the other OECD countries.