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This paper investigates the effects of equity market integration on the transmission of monetary policy shocks. Based on the assumption that financial market liberalization and integration lead to falling portfolio holding costs, we analyze its effect on a twocountry DSGE model with staggered prices and endogenous portfolio choice under incomplete markets. The model predicts that the reaction of stock prices, output and RER becomes muted upon impact and less persistence with falling portfolio holding costs. To test for a similar pattern in the data, we estimate a VAR with rolling coefficients for Australia, which provides a good case study. We identify a monetary policy shock with the sign restriction approach. The impulse responses generated by the data are consistent with the prediction of the model and imply that equity market liberalization seems to weaken the impact of monetary policy, at least on stock prices.

This paper presents a reconstruction of the evolution of the EU social agenda from the late 1990s. It shows that – despite being uneven and at times truncated – EU advocacy for social investment as a new social policy paradigm has been increasing over the years. The paper then questions how such advocacy affected European citizens' social rights. Building on two novel databases, which systematically collect information on all EU legislative (binding and non-binding) provisions as well as EU case-law from the end of the 1990s up to 2021, this paper explores EU social investment rights by looking at the power resources that are guaranteed to individuals. It emerges that, despite the broad, coherent, and rich framework for social investment principles offered by the EU, resources allocated to citizens remain quite limited. Citizens are not legally entitled to any specific social investment right, except for work-life balance-related parental and care leaves. Enforcement channels are also only limited to paid leave related issues. Instrumental resources to facilitate access to social investment services are mostly limited to mobile EU citizens.

We consider the real life implementation of some key elements of the new economic governance framework for the euro area. The main findings are the following. The Country Specific Recommendations issued in the context of the European Semester seem to be too little 'specific' to constrain governments in general and even less creditor governments, who so far have been able to ignore them. We argue that the Excessive Imbalances Procedure should be based much more on forward looking variables and on deviations from the euro area average instead of absolute thresholds. The emphasis on cyclically adjusted balances in the reformed Stability and Growth Pact, as well as the Fiscal Compact (formally the TSCG) will face serious problems of implementation given the uncertainties surrounding the estimates of the cyclical component and the frequent revisions this component is subject to. Finally we show that the rationale for fiscal policy coordination, namely spill-over effects from national actions to the rest of the euro area, change nature in different economic circumstances. During a financial crisis much more coordination is desirable than during normal times. This implies that the set of ambitious rules for economic policy coordination created under the impression of the euro crisis might not be appropriate for different circumstances.

PurposeThis paper sets out to explore three areas in which the experience of the great depression might be relevant today: monetary policy, fiscal policy, and the systemic stability of banks.Design/methodology/approachA critical review of the US data for the 1920s and 1930s is presented and stylised facts for monetary, fiscal and banking policies during the noughties are shown and compared with those of the great depression.FindingsThe authors confirm the consensus on monetary policy: deflation and massive bank failures must be avoided. With regard to fiscal policy it is impossible to confirm a widespread opinion according to which fiscal policy did not work because it was not tried. The paper finds that fiscal policy went to the limit of what was possible under the conditions as they existed then. Policy reaction after 1932 was no less bold than that of today if one accounts for sustainability issues. Lastly, the investigation of the US banking system shows a surprising resilience of commercial banks that remained profitable, at least on average, even during the worst years.Originality/valueFirst, the paper presents a systematic comparison between the great depression and the great recession, highlighting similarities and differences. Second, it suggests a relevant policy implication. Findings on commercial bank sector resilience suggest that at present national authorities have little choice but to make up for the losses on "legacy" assets and wait for banks to earn back their capital. However, to prevent future crises, at least a partial separation of commercial and investment banking seems justified.

The impact of the COVID-19 pandemic has not been equal across economic sectors, age groups, education levels and employment status.