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This book is the first study on the work of the Eurogroup - monthly informal meetings between euro area finance ministers, the Commission and the European Central Bank. Puetter convincingly demonstrates how this small, secretive circle of senior decision-makers shapes European economic governance through a routinised informal policy dialogue. Although the role of the Eurogroup has been contested since before the group's creation, its actual operation has never been subject to systematic evaluation. This book opens the doors of the meeting room and shows how an understanding of the interplay of

Finance ministers --- Europe -- Economic policy. --- Finance ministers -- Europe. --- Business & Economics --- Economic History --- European Union countries --- Economic policy. --- 334.150.2 --- EEC / European Union - EU -Europese Unie - Union Européenne - UE --- -338.94 --- Ui1 --- Finance secretaries --- Ministers of finance --- Secretaries of finance --- Cabinet officers --- raad van de Europese Gemeenschappen. --- Europe --- 338.94 --- raad van de Europese Gemeenschappen --- Commission. --- Eurogroup. --- European Central Bank. --- European decision-making. --- European economic governance. --- euro area. --- finance ministers. --- informal negotiations. --- member states. --- voluntary policy coordination.

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Using both regression- and VAR-based estimates, the paper finds that the exchange rate pass-through to import prices for a large number of countries is incomplete and larger than the pass-through to export prices. Previous studies have reported similar results, which give rise to the puzzle that while local currency pricing is needed to account for incomplete import price pass-through, it would not imply a lower export price pass-through. Recent explanations of this puzzle have emphasized markup adjustment in response to exchange rate changes. This paper suggests an alternative explanation based on the presence of both producer and local currency pricing. Using a dynamic general equilibrium model, the paper shows that a mix of producer and local currency pricing can explain the pass-through evidence even with a constant markup. The model can also explain the observed exchange rate and inflation variability as well as the fact that the regression and VAR estimates tend to be similar.

Finance --- Business & Economics --- International Finance --- Exchange rate pass-through. --- Prices. --- Commercial products --- Commodity prices --- Justum pretium --- Price theory --- Foreign exchange rate pass-through --- Pass-through of exchange rates --- Prices --- Consumption (Economics) --- Cost --- Costs, Industrial --- Money --- Cost and standard of living --- Supply and demand --- Value --- Wages --- Willingness to pay --- Foreign exchange rates --- Imports --- Exports --- Econometric models --- E-books --- International trade --- Foreign Exchange --- Macroeconomics --- Money and Monetary Policy --- Price Level --- Inflation --- Deflation --- International Policy Coordination and Transmission --- Monetary Policy --- Open Economy Macroeconomics --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- Monetary economics --- Export prices --- Import prices --- Exchange rates --- Exchange rate pass-through --- Currencies --- United States

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In an interconnected world, national economic policies regularly lead to large international spillover effects, which frequently trigger calls for international policy cooperation. However, the premise of successful cooperation is that there is a Pareto inefficiency, i.e. if there is scope to make some nations better off without hurting others. This paper presents a first welfare theorem for open economies that defines an efficient benchmark and spells out the conditions that need to be violated to generate inefficiency and scope for cooperation. These are: (i) policymakers act competitively in the international market, (ii) policymakers have sufficient external policy instruments and (iii) international markets are free of imperfections. Our theorem holds even if each economy suffers from a wide range of domestic market imperfections and targeting problems. We provide examples of current account intervention, monetary policy, fiscal policy, macroprudential policy/capital controls, and exchange rate management and show that the resulting spillovers are Pareto efficient, as long as the three conditions are satisfied. Furthermore, we develop general guidelines for how policy cooperation can improve welfare when the conditions are violated.

Foreign exchange rates --- Monetary policy --- International economic relations --- Economic policy, Foreign --- Economic relations, Foreign --- Economics, International --- Foreign economic policy --- Foreign economic relations --- Interdependence of nations --- International economic policy --- International economics --- New international economic order --- Economic policy --- International relations --- Economic sanctions --- Econometric models. --- Exports and Imports --- Macroeconomics --- International Economics --- International Lending and Debt Problems --- Open Economy Macroeconomics --- Taxation and Subsidies: Externalities --- Redistributive Effects --- Environmental Taxes and Subsidies --- Trade: General --- Externalities --- Macroeconomics: Consumption --- Saving --- Wealth --- International Policy Coordination and Transmission --- Spillovers --- Imports --- Exports --- Consumption --- International cooperation --- Financial sector policy and analysis --- International trade --- National accounts --- International organization --- International finance --- Economics --- China, People's Republic of

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We study how low interest rates in the United States affect risk taking in the market of crossborder leveraged corporate loans. To the extent that actions of the Federal Reserve affect U.S. interest rates, our analysis provides evidence of a cross-border spillover effect of monetary policy. We find that before the crisis, lenders made ex-ante riskier loans to non- U.S. borrowers in response to a decline in short-term U.S. interest rates, and, after it, in response to a decline in longer-term U.S. interest rates. Economic uncertainty and risk appetite appear to play a limited role in explaining ex-ante credit risk. Our results highlight the potential policy challenges faced by central banks in affecting credit risk cycles in their own jurisdictions.

Risk --- Economics --- Uncertainty --- Probabilities --- Profit --- Risk-return relationships --- Econometric models. --- Banks and Banking --- Industries: Financial Services --- Financial Markets and the Macroeconomy --- Monetary Policy --- International Finance: General --- International Policy Coordination and Transmission --- International Financial Markets --- Financial Institutions and Services: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Interest Rates: Determination, Term Structure, and Effects --- Finance --- Financial services law & regulation --- Loans --- Syndicated loans --- Credit risk --- Market risk --- Short term interest rates --- Financial institutions --- Financial regulation and supervision --- Financial services --- Financial risk management --- Interest rates --- United States

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This paper discusses proposals for common euro area sovereign securities. Such instruments can potentially serve two functions: in the short-term, stabilize financial markets and banks and, in the medium-term, help improve the euro area economic governance framework through enhanced fiscal discipline and risk-sharing. Many questions remain on whether financial instruments can ever accomplish such goals without bold institutional and political decisions, and, whether, in the absence of such decisions, they can create new distortions. The proposals discussed are also not necessarily competing substitutes; rather, they can be complements to be sequenced along alternative paths that possibly culminate in a fully-fledged Eurobond. The specific path chosen by policymakers should allow for learning and secure the necessary evolution of institutional infrastructures and political safeguards.

Finance --- Business & Economics --- International Finance --- Euro-bond market. --- International finance. --- International monetary system --- International money --- Eurobond market --- International economic relations --- Foreign exchange --- International finance --- Euro-bond market --- E-books --- Finance: General --- Investments: Bonds --- Macroeconomics --- Public Finance --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Financial Markets and the Macroeconomy --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- International Monetary Arrangements and Institutions --- Financial Aspects of Economic Integration --- Debt --- Debt Management --- Sovereign Debt --- Intergovernmental Relations --- Federalism --- Secession --- General Financial Markets: General (includes Measurement and Data) --- Fiscal Policy --- Portfolio Choice --- Investment Decisions --- Public finance & taxation --- Investment & securities --- Bonds --- Government asset and liability management --- Public debt --- Fiscal union --- Liquidity --- Financial institutions --- Public financial management (PFM) --- Fiscal policy --- Asset and liability management --- Finance, Public --- Debts, Public --- Economics --- Germany