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on European Economics |
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Issue of 2026–04–13
seven papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Wagner, Joachim (Leuphana University Lüneburg) |
| Abstract: | The use of advanced technologies like artificial intelligence, robotics, or smart devices will go hand in hand with higher productivity, higher product quality, and lower trade costs. Therefore, it can be expected to be positively related to export activities. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union collected in 2025 to shed further light on this issue by investigating the link between the use of advanced technologies and extensive margins of exports. Applying a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), which does not impose any restrictive assumptions for the functional form of the relation between margins of exports, use of advanced technologies, and any control variables, we find that firms which use more advanced technologies do more often export and do export to more different destinations. |
| Keywords: | advanced technologies, exports, firm level data, Flash Eurobarometer 559, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18496 |
| By: | Carmassi, Jacopo; Evrard, Johanne; Gati, Zakaria; Milea, Cyprien; Parisi, Laura; Rouveyrol, Clément; Lemaire, Olivier Dumora; Spolaore, Alessandro |
| Abstract: | This paper provides an evidence-based assessment of the EU supervisory landscape by combining a comprehensive mapping of supervisory models and authorities with an analysis of capital market players across key sectors, including market infrastructures, asset management, and crypto-asset service providers. It documents a highly complex and fragmented supervisory architecture, characterised by a wide variety of national supervisory models and multiple authorities operating across the Union. While regulatory harmonisation through the Single Rulebook has progressed, supervisory responsibilities for capital market players remain largely national, with limited and uneven EU-level powers. This institutional fragmentation is increasingly misaligned with market realities, as capital markets have become more cross-border and integrated, albeit with important differences across sectors. The paper develops an analytical framework to assess options for a review of the EU capital markets supervisory architecture. Based on the sectoral mapping, it distils a few guiding principles for supervisory integration: a consistent approach based on common criteria (such as size and cross-border relevance) while accounting for sectoral specificities, and close cooperation between EU and national authorities. Finally, it conducts a sensitivity analysis around alternative degrees of supervisory integration and calibration criteria, and discusses the governance arrangements needed to make integrated supervision effective in practice. The analysis shows that a more integrated supervisory framework could deliver four key benefits: enhanced supervisory effectiveness, improved supervisory efficiency, reduced complexity and compliance burdens for firms operating across jurisdictions, and the removal of supervisory barriers that currently hinder the cross-border integration of EU capital markets. JEL Classification: E61, F36, G18, G20, G23 |
| Keywords: | capital markets union, ESMA, financial integration, financial supervision, market infrastructure, savings and investments union |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2026383 |
| By: | Mr. Andre O Santos |
| Abstract: | The objective of this paper is to assess the impact of single-name and widespread markdowns in syndicated leveraged loans on systemic risk in the euro area. Systemic risk implications of markdowns are simulated with network valuation models (as in Bardoscia et al. (2016)) and extended to accommodate recapitalization of systemically important banks. Key results indicate that, while the impact of single-name and widespread markdowns in syndicated leveraged loans on banks’ equity is not significant under a strong confidence in the banking system, their impact could be devastating if confidence is low. This could be mitigated by timely and calibrated recapitalization of systemically important banks. |
| Keywords: | Contagion; syndicated loans; euro area banks; liability networks; recapitalization. |
| Date: | 2026–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/061 |
| By: | Ece Fisgin; Johannes Fleck; Keith Richards |
| Abstract: | We show that the EU's 2018 retaliation against US steel and aluminum tariffs targeted goods with low US import dependence and high substitutability. For the majority of tariffed goods, the US share of EU imports declined notably and remained below pre-2018 levels even after the retaliatory tariffs were lifted, reflecting asymmetric effects of tariffs on trade diversion. Moreover, although the retaliatory tariffs were instantly and fully passed through to EU importers, the retaliation did not lead to domestic price pressures as we find no evidence for inflationary effects on consumer and producer prices. |
| Keywords: | Trade policy; International trade; Prices |
| JEL: | E31 F13 F14 F42 F62 |
| Date: | 2026–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:102987 |
| By: | Zorell, Nico; Zwick, Christoph |
| Abstract: | The Recovery and Resilience Facility (RRF), launched in 2021, aims to promote long-term economic growth in EU Member States by incentivising structural reforms and investments. This paper explores a related supply-side transmission mechanism: improvements in institutional quality, as measured by the Worldwide Governance Indicators. Using a Bayesian synthetic control model and data up to 2024, we find robust and economically meaningful RRF-induced improvements in institutional quality in Italy. For other main RRF beneficiary countries, the evidence of such an effect ranges from suggestive to limited. We show that this cross-country variation is broadly consistent with the implementation of the national Recovery and Resilience Plans in terms of implementation speed and reform mix. While it is too early to draw firm policy conclusions, the findings lend support to the view that conditional, reform-linked financing instruments of the RRF type can improve institutional quality and, thereby, long-term growth prospects – provided that the reforms are well designed and effectively implemented. JEL Classification: C11, E02, E65, O43 |
| Keywords: | institutions, NextGenerationEU, Recovery and Resilience Facility, reforms |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263212 |
| By: | Ibadoghlu, Gubad |
| Abstract: | This article examines the implications of the European Union's recent energy policy developments, with a particular focus on the strategy to phase out Russian gas imports and diversify supply sources. It analyzes the vulnerabilities inherent in the EU's diversification approach, highlighting the introduction of new regulatory measures-most notably Regulation (EU) 2026/261-which establish strict controls to prevent the re-entry of Russian gas through third countries. These measures, including enhanced origin verification requirements, carry significant implications for external suppliers such as Azerbaijan and transit countries like Türkiye. The analysis identifies a structural dilemma facing the EU: despite diversification efforts, approximately 90% of its gas supply remains externally sourced, exposing the bloc to geopolitical risks, global price volatility, and long-term infrastructure lock-in. While dependence on Russian pipeline gas has declined sharply, the EU has increasingly shifted toward alternative suppliers, particularly liquefied natural gas (LNG) from the United States, which accounted for an estimated 57% of EU LNG imports by 2025. This shift raises critical questions about whether diversification efforts are effectively reducing dependency or merely replacing one dominant supplier with another. The article argues that the EU's external energy policy must balance short-term energy security with long-term sustainability objectives. It concludes that the success of the EU's energy transition will depend not only on eliminating reliance on Russian gas but also on avoiding the creation of new structural dependencies. |
| JEL: | P16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:339652 |
| By: | Estrin, Saul; Meyer, Klaus; Kretschmer, Tobias |
| Abstract: | Competition policy establishes the institutional framework for competitive dynamics in market economies. Recently, the relevance and impact of traditional competition policy has been challenged by the rise of the digital economy, where we see a small number of large platform firms, frequent takeovers and mergers, and the potential for using customer data to join and dominate previously separate markets. We provide a framework to explain the basis for contemporary competition policy, and explore implications for company strategy within and beyond the digital sector. Some of the most radical thinking about how competition policy might address the challenge of the digital economy originates from Europe, itself a major market for technology firms. We illustrate this thinking with exemplars from the practice of the EU Commission. Although existing competition policy can provide a basis for addressing monopolistic abuses in digital markets, practices are shifting to address novel sources of market power, including the governance architecture of digital platform firms and their ecosystems, the transferability of personal data, and the interoperability of systems and standards. We consider implications for policymakers. Corporate strategists must also understand how the evolving competition policy framework is impacting competitive dynamics of both platform operator and platform complementing entrepreneurs. |
| Keywords: | European competition policy; mergers and aquisitions; abuse of monopoly power; platforms; digital sector; personal data |
| JEL: | J50 J1 |
| Date: | 2025–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127060 |