Relative to the US, productivity growth and investment in R&D in lagging in the EU, where it is more difficult to finance and scale up promising, innovative startups. Many of the most successful EU startups move elsewhere for financing, causing the EU to lose out on both the direct growth...

The EU's fiscal framework needs reform. While existing fiscal rules have had some impact in constraining deficits, they did not prevent deficits and debt ratios that have threatened the stability of the monetary union in the past and that continue to create vulnerabilities today. The framework...

While Europe's response to the pandemic has been laudable, there remains more to be done in order to prevent economic scarring and ensure a robust recovery.

This note outlines a concrete proposal for a euro area central fiscal capacity (CFC) that could help smooth both country-specific and common shocks. Specifically, it proposes a macroeconomic stabilization fund financed by annual contributions from countries that are used to build up assets in...

We model the relationship between a firm's growth opportunities and its financing policy. Financially constrained firms have an incentive to maintain reserve borrowing capacity when expected future investment opportunities are high. These strategic savings allow firms to respond optimally to new...