Related papers: On The EU and Euro-zone Stability
In 2018, allowance prices in the EU Emission Trading Scheme (EU ETS) experienced a run-up from persistently low levels in previous years. Regulators attribute this to a comprehensive reform in the same year, and are confident the new price…
The AI act is the European Union-wide regulation of AI systems. It includes specific provisions for general-purpose AI models which however need to be further interpreted in terms of technical standards and state-of-art studies to ensure…
We study the emergence of instabilities in a stylized model of a financial market, when different market actors calculate prices according to different (local) market measures. We derive typical properties for ensembles of large random…
This paper estimates the causal effect of EU cohesion policy on regional output and investment, focusing on the Cohesion Fund (CF), a comparatively understudied instrument. Departing from standard approaches such as regression discontinuity…
Phase transitions, characterized by abrupt shifts between macroscopic patterns of organization, are ubiquitous in complex systems. Despite considerable research in the physical and natural sciences, the empirical study of this phenomenon in…
This paper examines the impact of climate shocks on 13 European economies analysing jointly business and financial cycles, in different phases and disentangling the effects for different sector channels. A Bayesian Panel Markov-switching…
This paper investigates the presence of long memory in corporate bond and stock indices of six European Union countries from July 1998 to February 2015. We compute the Hurst exponent by means of the DFA method and using a sliding window in…
Seasonal climate forecasts are being used increasingly across a range of application sectors. A recent UK governmental report asked: How good are seasonal climate forecasts on a scale of 1-5 (where 5 is very good), and how good can we…
The Euro (EUR) has been a currency introduced by the European Community on Jan. 01, 1999. This implies eleven countries of the European Union which have been found to meet the five requirements of the Maastricht convergence criteria. In…
Within the last two decades, Foreign Direct Investment (FDI) has been observed as one of the prime instruments in the process of restructuring the European economies in transition. Many scholars argue that FDI is expected to be a source of…
After the fall of the Berlin Wall, Central and Eastern Europe were subject to strong polarisation processes. This article proposes examines two neglected aspects regarding the transition period: a comparative static assessment of foreign…
Algorithmic stability is a central concept in statistics and learning theory that measures how sensitive an algorithm's output is to small changes in the training data. Stability plays a crucial role in understanding generalization,…
Identification of the parameters of stable linear dynamical systems is a well-studied problem in the literature, both in the low and high-dimensional settings. However, there are hardly any results for the unstable case, especially…
This papers aims to establish the empirical relationship between income, net wealth and their joint distribution in a selected group of euro area countries. I estimate measures of dependence between income and net wealth using a…
The fixed-event forecasting setup is common in economic policy. It involves a sequence of forecasts of the same (`fixed') predictand, so that the difficulty of the forecasting problem decreases over time. Fixed-event point forecasts are…
We analyse the importance of international relations between countries on the financial stability. The contagion effect in the network is tested by implementing an epidemiological model, comprising a number of European countries and using…
The recent financial crisis of 2008 and the 2011 indebtedness of Greece highlight the importance of understanding the structure of the global financial network. In this paper we set out to analyze and characterize this network, as captured…
The European sovereign debt crisis has impaired many European banks. The distress on the European banks may transmit worldwide, and result in a large-scale knock-on default of financial institutions. This study presents a computer…
We use a FAVAR model with proxy variables and sign restrictions to investigate the role of the euro area's common output and inflation cycles in the transmission of monetary policy shocks. Our findings indicate that common cycles explain…
Common asset holdings are widely believed to have been the primary vector of contagion in the recent financial crisis. We develop a network approach to the amplification of financial contagion due to the combination of overlapping…