Escape variants can cause new waves of COVID-19 and put vaccination strategies at risk. To prevent or delay the global spread of these waves, virus mobility needs to be minimised through screening and testing strategies, which should also cover vaccinated people. The costs of these strategies...

Higher levels of economic activity tend to go hand-in-hand with additional energy use and consumption of natural resources. As fossil fuels still account for 80 percent of the global energy mix, energy consumption remains closely related to greenhouse gas emissions and hence to climate...

In the COVID-19 pandemic, governments have, among other measures, mandated the use of COVID certificates to prove vaccination, recovery or a recent negative test, and have required individuals to show certificates to access shops, restaurants, and education or workplaces. While arguments for and...

The total market value of green bonds exceeded half a trillion dollars in 2021 and will increase to $1 trillion by the end of 2022. The growing European green sovereign bond market has a value of close to €147 billion at issuance. We study whether investors price green sovereign bonds...

In the wake of the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia's access to hard international currency. However, Russia remains the world's first exporter of oil and gas, and at current energy prices...

The euro area faces a double challenge: debt overhang and the need for price adjustment. This paper reviews the debt challenges in the household and corporate sectors and maps out some policy options. In particular, we document the increase in private debt prior to the crisis and consider how...

Banking and sovereign risk in the euro area are highly correlated. This working paper sheds light on the link. We study the stock market performance and the holdings of government debt of the banks stress tested by the European Banking Authority in July and December 2011. Banks’ holdings of...

We analyse corporate balance sheet adjustment episodes in Germany and Japan, as well as a sample of 30 countries, using national account data. Corporate balance sheet adjustment tends to be long lasting and associated with a strong impact on current accounts, wages and investment. Adjustment...

The European Semester is a new institutional process that provides EU member states with ex-ante guidance on fiscal and structural objectives. The Semester’s goals are ambitious and it is still uncertain how it will fit into the new EU economic governance framework. We find that member states...

With a unique data set summarizing the quality of rules-based fiscal governance in EU member states, we show that stronger fiscal rules in euro area members reduce sovereign risk premia, in particular in times of market stress. To do so, we develop a model of sovereign spreads that are...