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on European Economics |
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Issue of 2026–08–31
thirteen papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Istrefi, Klodiana; Odendahl, Florens; Sestieri, Giulia |
| Abstract: | This paper introduces the Euro Area Communication Event-Study Database (EACED), a new dataset tracking intraday financial market movements around 304 ECB Governing Council meetings (ECBGC) and 5, 100 inter-meeting communication (IMC) events by GC members, primarily in the form of speeches and interviews. We document that IMC events are associated with significant market movements often comparable to, or larger than, those following ECB policy announcements, particularly for longer maturity yields. Importantly, these effects are not limited to communication from the ECB President but also from other Governing Council members. Like ECBGC announcements, IMC events convey multidimensional information: three structurally identified factors explain a large share of the yield curve movements around IMC surprises. Finally, we show that IMC events provide relevant information for identifying the effects of monetary policy shocks on euro area output and inflation in a Bayesian Vector Autoregression model. |
| Keywords: | Monetary policy; Ecb; Financial markets; Euro area |
| JEL: | E03 E50 E61 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19242 |
| By: | Giannone, Domenico; Primiceri, Giorgio |
| Abstract: | Post-covid inflation was predominantly driven by unexpectedly strong demand forces, not only in the United States, but also in the Euro Area. In comparison, the inflationary impact of adverse supply shocks was less pronounced, even though these shocks significantly constrained economic activity. With output already weakened by these unfavourable supply conditions, any attempt by the European Central Bank to further mitigate the demand-driven inflationary pressures---to maintain inflation near its 2-percent target---would have severely hampered an already anaemic recovery. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19377 |
| By: | Biondi, Filippo; Inferrera, Sergio; Mertens, Matthias; Miranda, Javier |
| Abstract: | We study changes in job reallocation in Europe after 2000 using novel microaggregated data that we collected for 19 European countries. In all countries, we document broad-based declines in job reallocation rates that concern most economic sectors and size classes. These declines are mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Simultaneously, employment shares of young firms decline. Consistent with US evidence, firms’ employment has become less responsive to productivity shocks. However, the dispersion of firms’ productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a firm-level framework that relates changes in firms’ market power, labor market imperfections, and production technology to firms’ responsiveness and job reallocation. Using German firm-level data, we find that changes in markups and labor output elasticities, rather than adjustment costs, are key in rationalizing declining responsiveness. |
| Keywords: | Business dynamism; job reallocation; productivity; responsiveness of labor demand; market power; technology; European cross-country data |
| JEL: | D24 D43 J21 J23 J42 L11 L25 |
| Date: | 2025–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:eoe:escoed:escoe-dp-2025-16 |
| By: | Christian Dustmann; Tommaso Frattini; Camilla Piovesan |
| Abstract: | Employment among immigrants in the European Union has reached its highest level since 2017, yet important differences remain across origin groups, countries and demographic characteristics. While EU immigrants frequently match or exceed native employment rates across Member States, substantial employment disadvantages remain concentrated among non-EU immigrant women and highly educated non-EU immigrants, pointing to significant untapped labour market potential. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:crmrep:2606 |
| By: | Schwarzbauer, Wolfgang; Gillesberger, Michael; Perschke, Simon |
| Abstract: | Regional economic resilience, the capacity of regions to absorb and recover from external shocks, has gained renewed attention in light of recent crises. This paper examines how different forms of economic diversity shaped the resilience of European regions during the Global Financial Crisis of 2008/09. We distinguish between gross export diversification, value-added export diversification, and domestic sectoral diversity, thereby capturing both external and internal dimensions of economic structure. Our results show that regions with more diversified industrial structures and value-added export linkages experience significantly smaller output losses during the initial downturn. In contrast, the recovery phase is primarily driven by specialization in industrial activities and regional innovation capacity, which facilitate faster postcrisis adjustment. These findings remain robust when accounting for spatial spillovers across regions. Combining gross and value-added trade measures with regional industrial structures, this study provides novel evidence on the distinct channels through which diversity affects resilience. The results highlight a trade-off between short-term shock absorption and the speed of recovery, with important implications for regional development strategies and crisis preparedness. |
| Abstract: | Wirtschaftliche Krisen wirken sich sehr unterschiedlich auf Regionen aus. Während einige Regionen starke Einbrüche verzeichnen, zeigen andere eine höhere Widerstandsfähigkeit und erholen sich schneller. Die Ursachen dieser Unterschiede sind insbesondere vor dem Hintergrund jüngster globaler Krisen von wachsender Bedeutung. Diese Studie untersucht, wie verschiedene Formen wirtschaftlicher Diversifikation die Resilienz europäischer Regionen während der globalen Finanzkrise 2008/09 beeinflusst haben. Dabei unterscheiden wir zwischen Branchen-Diversifikation, Exportdiversifikation und der Einbindung in globale Wertschöpfungsketten. So können sowohl interne Wirtschaftsstrukturen als auch externe Handelsverflechtungen berücksichtigt werden. Die Ergebnisse zeigen, dass Regionen mit einer breiteren Branchen-Basis besser gegen wirtschaftliche Schocks geschützt sind. Eine diversifizierte Wirtschaftsstruktur und stärkere Verflechtungen entlang der Wertschöpfungsketten tragen dazu bei, negative Auswirkungen abzufedern und Produktionsrückgänge zu begrenzen. Dagegen sind stark spezialisierte Regionen - insbesondere in der Produktion - stärker von Einbrüchen der externen Nachfrage betroffen. Dieser Stabilisierungsvorteil geht jedoch mit einem Zielkonflikt einher. Diversifikation erleichtert zwar die Abfederung von Krisen, führt aber nicht automatisch zu einer schnelleren Erholung. Vielmehr sind es spezialisierte Regionen - insbesondere geprägt durch industrielle Produktion - sowie eine hohe Innovationsfähigkeit, die eine raschere Anpassung und Erholung erfahren. Darüber hinaus zeigt die Analyse die Bedeutung räumlicher Verflechtungen. Wirtschaftliche Schocks und Erholungsprozesse verbreiten sich über regionale Produktionsnetzwerke, bleiben jedoch weitgehend innerhalb nationaler Grenzen. Dies unterstreicht die Rolle institutioneller und wirtschaftspolitischer Rahmenbedingungen auf nationaler Ebene. Insgesamt weisen die Ergebnisse auf einen grundlegenden Zielkonflikt hin: Diversifikation erhöht die Stabilität in Krisenzeiten, während Spezialisierung eine schnellere Erholung begünstigt. Daraus ergeben sich wichtige Implikationen für die regionale Wirtschaftspolitik, da keine einheitliche Strategie zur Förderung von Resilienz ableitbar ist. |
| Keywords: | regional economics, economic resilience, export diversification, multi-regional input-output model, global value chains, Financial Crisis 2008 |
| JEL: | R11 R15 F15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ecoarp:342493 |
| By: | Marie-Estelle Binet (AMURE - Aménagement des Usages des Ressources et des Espaces marins et littoraux - Centre de droit et d'économie de la mer - IRD - Institut de Recherche pour le Développement - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - UBO EPE - Université de Brest - CNRS - Centre National de la Recherche Scientifique); Jean-Sébastien Pentecôte (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, UNICAEN - Université de Caen Normandie - NU - Normandie Université) |
| Abstract: | This paper provides new evidence on the existence and magnitude of Okun's law across the European NUTS2 regions. We first estimate Okun's coefficients for each of the 228 regions over the period 2000-2020 using the Common Correlated Effects Mean Group (CCEMG) estimator. The results reveal significant heterogeneity, with only 42 regions demonstrating the expected negative relationship between unemployment and output, while it is insignificant in the remaining regions. We then introduce a double-hurdle model to explain two key aspects: a probit equation identifies the factors that contribute to the presence of Okun's law, while a tobit model uncovers the short-term or structural determinants of its strength where it exists. We find that the prevalence of Okun's law is influenced by the size of the informal labour sector, the labour inactivity trap, the share of value-added from agriculture, and the proportion of older workers. Meanwhile, the magnitude of the unemployment response to GDP growth is shaped by the inflation rate, working hours, the share of young workers, and labour mobility among low-skilled workers. The construction sector has opposite effects on the probability and strength of Okun's law. Thus, national and regional policies must be combined to effectively reduce unemployment. |
| Keywords: | Regional convergence, NUTS2 regions, Double hurdle model, Okun's law coefficient |
| Date: | 2024–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05679037 |
| By: | Jonathan Pardo; Sulin Sardoschau |
| Abstract: | Do migrants become more anti-immigration over time? How do incumbents react to new arrivals? We link large-scale survey data to local immigration flows across 138 European regions from 2002 to 2024, identifying effects via a leave-out shift-share instrument within a triple-difference design. Immigrants arrive strongly pro-immigration, but support erodes over time, halving the native-immigrant gap within two decades. Exposure to new inflows contributes to this convergence: a rising local immigrant share reduces pro-immigration attitudes for both groups, with substantially larger effects for first-generation immigrants. Low-skilled incumbents respond more to inflow size, high-skilled to newcomers' skill composition. |
| Keywords: | Immigration, backlash, attitudes, newcomers |
| JEL: | D74 J15 D83 Z10 D72 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26182 |
| By: | Ketevani Kapanadze; Mariola Pytlikova |
| Abstract: | In response to COVID-19, Schengen countries temporarily reintroduced internal border controls, disrupting cross-border integration. Using this policy change as a natural experiment and monthly nighttime lights data, we estimate the short-run effects on European municipalities. Municipalities along internal Schengen borders experienced a 3-4% decline in economic activity relative to interior municipalities, with larger estimated effects when external-border municipalities form the comparison group. Losses were greater in smaller and less densely populated municipalities and along economically asymmetric East-West borders, whereas municipalities along more economically similar borders generally experienced smaller declines. The effects also depended on the pre-pandemic purpose of cross-border mobility: higher shares of work- and business-related travel, services, and shopping were associated with larger losses, while the results for leisure and social mobility are consistent with greater scope for domestic reallocation of activity. Overall, the findings show that the local consequences of internal border closures depend on municipality characteristics, cross-border economic asymmetries, and the purpose of mobility. |
| Keywords: | Border closures; Cross-border mobility; Schengen Area; Nighttime lights; Local economic activity; Border regions; COVID-19; European integration |
| JEL: | R11 R12 R23 F15 F22 C21 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26218 |
| By: | Bremer, Björn (Central European University); Baccaro, Lucio |
| Abstract: | Central bank decisions have become politically contested. In response, central banks communicate more with the public, since their effectiveness rests on public trust. Yet whether they reach ordinary citizens is largely unknown. We exploit the European Central Bank’s unexpected announcement of the Pandemic Emergency Purchase Programme (PEPP) during the fieldwork of a March 2020 survey in Germany and Italy. Our results show that the same decisive intervention was rewarded only where it aligned with the perceived national interest: in Italy, trust in the ECB rose, strongest among news-followers and the left; in Germany, trust in the ECB did not move at all, even as trust in national institutions surged. Preferences for central bank goal independence moved in neither country. Citizens thus notice exceptional monetary policy decisions, but their responses are mediated by national interests and discourses, with asymmetric consequences for a central bank that makes one policy for many publics. |
| Date: | 2026–08–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:zyvjh_v1 |
| By: | Christelis, Dimitris; Georgarakos, Dimitris; Jappelli, Tullio; Kenny, Geoff |
| Abstract: | We use new euro area representative data from the Consumer Expectations Survey (CES) to elicit household-specific propensities to invest and consume out of positive wealth shocks. Using a randomized assignment of hypothetical lottery gains ranging from €5, 000 to €50, 000 and a realistic menu of consumption, saving and asset choices, we estimate the causal effect of wealth shocks on risky asset ownership and conditional asset shares. Wealth shocks have a positive effect on stockholding (between 8.4 and 12.8 percentage points increase in participation for the largest wealth shock). The majority of households do not participate in the stock market, even after a large increase in wealth. The conditional asset share invested in risky assets is constant for wealth shocks up to €20, 000, and edges up slightly (by at most 2%) for larger prizes. Our evidence is consistent with constant relative risk aversion for the majority of risky asset investors, while we also find important heterogeneity in the level of risk aversion across individuals. |
| Keywords: | Household finance; Stock market participation; Risk aversion; Consumer expectations survey |
| JEL: | D14 G11 G51 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19279 |
| By: | Enriques, Luca; Nigro, Casimiro A.; Tröger, Tobias |
| Abstract: | European debates on competitiveness increasingly treat corporate law as a lever to help innovative firms scale. The European Commission's Proposal for a new "28th regime" seeks to introduce an optional, EU-wide corporate legal form designed, inter alia, to facilitate the cross-border scaling of innovative firms. A central instrument of the Proposal is the use of model articles of association to be adopted through future implementing acts. This Article argues that, while standardised articles may ease incorporation and lower drafting costs for ordinary unlisted firms, they fall short for VC-backed companies-the very cases that motivated the initiative. Building on prior work on venture capital contracting under mandatory corporate law, we identify four shortcomings. First, the architecture is incomplete: the Proposal omits a model shareholder agreement, even though effective VC contracting depends on the interaction between articles of association and shareholder arrangements. Second, the drafting process is overly generalist and unlikely to yield genuinely VC-specific templates. Third, the Proposal's fairness-oriented logic risks producing terms that clash with the asymmetric, statecontingent structures typical of VC deals. Fourth, the legal protection offered by the template is limited, focusing on formation-stage effects while leaving subsequent judicial intervention unconstrained. We propose four adjustments: introduce a model shareholders' agreement; create a dedicated VC drafting track; abandon fairness as the organising principle for VC templates; and provide a robust safe harbour covering both ex ante design and ex post enforcement. |
| Keywords: | 28th Regime, Entrepreneurship, EU Company Law, EU Inc., Innovation, Private Ordering, Startups, Venture Capital |
| JEL: | G38 K22 L26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:lawfin:342486 |
| By: | O'Mahony, Mary; Weale, Martin |
| Abstract: | We show how to decompose the contribution made by capital services to eco nomic growth into two components, depreciation services and net capital services. We apply this to examine the contributions to economic growth by depreciation and net capital services of both tangible and intangible investment. Looking at France, Germany, the UK and the US from 1997 to 2019, we find that while overall capital services contributed between 0.6 (Germany) and 1.4 (US) percentage points to growth in GVA, net of depreciation the contributions ranged from 0.1 (Germany) to 0.5 (US) percentage points. Looking only at intangibles we find gross contributions of 0.3 (Germany) to 0.7 (US) percentage points while net of depreciation the contributions of intangibles were 0.1 (Germany) to 0.2 (US) percentage points. We conclude that a focus on gross output overstates the importance of intangible capital in these economies. |
| Keywords: | Intangible Capital; Depreciation; Capital Services; Economic Growth; Growth Accounting |
| JEL: | C43 D24 E22 O34 O47 |
| Date: | 2026–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:eoe:escoed:escoe-dp-2026-06 |
| By: | Matthes, Jürgen |
| Abstract: | This paper proposes that the EU should build a cooperation platform together with the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). This platform could be named the Free and Fair and Trade Club (FFTC) - as the emerging EU-CPTPP cooperation is focused on rules-based, free and fair trade. The FFTC would stand for about 30 percent of global GDP and also of global trade. The guiding principle should be open plurilateralism. This entails multiregional voluntary cooperation based on different topical coalitions of the willing that is open for other countries to join when they adhere to the respective rules agreed by (a subset of) FFTC members. The case for the FFTC is reinforced by the fact that the great powers, the US and China, are undermining the rules based international order by employing coercive measures. Against this background, Canadian Prime Minister Mark Carney called for an alliance of middle powers. The FFTC could become a building bloc for such an alliance. Pooling the economic weight of FFTC members' markets would create a power base that can be leveraged in conflicts with the great powers. If successfully coordinated, it could be used on the defensive side in two important ways: First, for mutual protection of FFTC members against a 'divide-et-impera' approach of the great powers. If the latter erect unfair trade barriers or use coercive export restrictions, a NATO-like Article 5 approach could ideally be created: Even if only one FFTC member was targeted by the great powers, all FFTC would stand together by supporting each other or even by coordinating retaliation. The second option would entail protecting FFTC members against unfair market distortions like massive industrial subsidies or an undervalued currency. To this aim, a trade defense measure of one FFTC member would be adopted by all other FFTC members. The FFTC could also be used for more offensive objectives. Preferential trade integration among FFTC members, e.g. in digital trade or E-commerce, would create substantial trade diversion to the detriment of the great powers. In an escalating conflict, it would even be possible to withdraw the WTO's most-favoured nation status of the great powers -creating severe trade diversion also in goods trade.While these far-reaching options are a longer term prospect, they should form part of the strategic thinking of the EU. There are at least ten reasons why the FFTC case should be pursued and furthered by the EU. The EU obtains a stronger lever to strengthen the WTO. The EU can raise the chances of a meaningful reform of the rules-based international trading order. The FFTC can be a platform for a diversified friendshoring strategy on a trusted basis. The FFTC offers opportunities to coordinate on the setting of new product standards. The FFTC can become a counterweight to the great powers and can strengthen the rule of law again.The EU could be in the driving seat in the FFTC. The EU would enlarge its footprint in the Indo-Pacific. The FFTC could be a new player in the new multipolar order and the bipolar hegemonial conflict. The FFTC can limit the divide between industrial countries and developing countries. Via the FFTC the EU could offer alternatives to the US and China for developing countries. Obviously, there is the danger that the great powers intimidate FFTC members and try to prevent them from joining forces. The US security guarantees for Europe and Asia outside China are also an important case in point in this respect. However, it would be against core US strategic interests to yield Asia to China or Europe to Russia. While this is no guarantee in view of the erratic decision making of the current US president, the Trump administration will surely take note if the EU and the CPTPP move closer and discuss the formation of a FFTC because of the economic weight of FFTC members and the entailed power of FFTC coordination. |
| Keywords: | Europäische Union, Wachstum und Konjunktur, Welthandel, Weltwirtschaft |
| JEL: | F5 F13 F15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkpps:343062 |