Search

Begin New Search Author Daniel Gros Publication Year within 10 Years

1. Global Monetary Policy Divergence and the Reemergence of Global Imbalances

Author:
Daniel Gros
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Developed economies are paying remarkably little attention to coordinating their monetary policies. This is an unavoidable consequence of the independence of central banks, which faithfully follow their purely domestic mandates except in times of crisis. As a result, global monetary policies have reached unprecedented levels of divergence. This divergence is set to widen—primarily due to differences in the relative strength of labor markets—while global current account imbalances return. Meanwhile, exchange rates have not reacted as economists expected; the dollar has weakened even as policy rates have increased. Economic tensions will likely become more disruptive the longer global imbalances go uncorrected. Likewise, the global economy will become more vulnerable to shocks. Yet by focusing on bilateral trade imbalances, the United States has mistakenly singled out China when the global imbalances between the United States and the eurozone is the more critical issue. The growing global imbalances are reflected more in the eurozone current account surplus and U.S. fiscal policy than in China’s shrinking surplus.
Topic:
International Trade and Finance, Monetary Policy, Exchange Rate Policy, and Economic Inequality
Political Geography:
Global Focus

2. Tightening by Stealth: Why keeping the balance sheet of the Federal Reserve constant is equivalent to a gradual exit

Author:
Daniel Gros
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Exiting from unconventional monetary policies is now a key issue for central banks, and especially for the US Federal Reserve. This paper argues that the Fed already began this exit some time ago, and that the relevant part of its balance sheet has already shrunk by about one-quarter of GDP. Pursuing the current policy of reinvesting would lead to a full exit within ten years.
Topic:
International Affairs and Global Political Economy
Political Geography:
America

3. The Eurozone’s Hidden Strengths

Author:
Daniel Gros
Publication Date:
06-2017
Content Type:
Commentary and Analysis
Institution:
Centre for European Policy Studies
Abstract:
For years, the eurozone has been perceived as a disaster area, with discussions of the monetary union’s future often centred on a possible breakup. When the British voted to leave the European Union last year, they were driven partly by the perception of the eurozone as a dysfunctional and possibly unsalvageable project. Yet, lately, the eurozone has become the darling of financial markets – and for good reason. The discovery of the eurozone’s latent strength was long overdue. Indeed, the eurozone has been recovering from the crisis of 2011-12 for several years. On a per capita basis, its economic growth now outpaces that of the United States. The unemployment rate is also declining – more slowly than in the US, to be sure, but that partly reflects a divergence in labour-force participation trends.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe