Thanks to a subscriber for this list of academic reports contributed in the spirit of Empowerment Through Knowledge.

CBO: "The Budget and Economic Outlook"


Pew: "The trillion dollar gap. Underfunded state retirement systems and the roads to reform"


Bruegel: "A COMPREHENSIVE APPROACH TO THE EURO-AREA DEBT CRISIS" (Click through to the PDF)

Bini Smaghi speech: "Eurozone, European crisis & policy responses" (speech is very much worth reading through and has very good charts)


BoE: "The contractual approach to sovereign debt restructuring"


Fed: "Making Sense of China's Excessive Foreign Reserves"


BoE: "Low interest rates and housing booms: the role of capital inflows, monetary policy and financial innovation"


OECD: "A Public Debt Management Perspective on Proposals for Restrictions on Short Selling of Sovereign Debt"


OECD: "HEALTH CARE SYSTEMS: GETTING MORE VALUE FOR MONEY"

Eoin Treacy's view I have noticed that the data quoted in most of the academic reports crossing my desk is usually not up to date. I assume this is because of the lag in collating data from a host of different institutions and countries but if subscribers know of more current data such as Debt/GDP ratios for 2010 we would be interested in seeing them.

Lorenzo Bini Smaghi's speech to the Goldman Sachs Global Macro Conference in Hong Kong on February 22nd is worth a look, especially for some of the charts attached. Here is the conclusion:

Financial markets are testing the strength and resilience of the euro area and the willingness and ability of the euro area authorities to preserve the integrity and stability of the euro as a currency.

The institutional response to their challenge has been swift, strong and resolute. As regards monetary policy, the Eurosystem has implemented a set of measures that ensure the provision of liquidity to the euro area financial system, including to the banks of those
peripheral countries that are currently subject to the greatest market scrutiny.

With respect to fiscal and macroeconomic imbalances, euro area governments are now strengthening the rules for fiscal and broader economic policy coordination. They have created and are refining facilities that can provide external financial support to those Member States facing the most intense pressures in sovereign debt markets. These developments aim to correct the deficiencies in the institutional architecture of Economic and Monetary Union exposed by the financial crisis. These facilities need to have sufficient resources as well as the flexibility to contain market pressures and coordinate the public and private sectors so as to achieve a sustainable and mutually beneficial outcome in an environment where several equilibria may be possible.

The Asian experience in the mid- to late-1990s demonstrates that radical reform can lead to a sustained recovery - one achieved largely without restructuring public debts. Indeed, one can argue that Asia has emerged from its financial crisis stronger than before: the institutional weaknesses which contributed to the build-up of financial fragilities, but were masked by high growth rates during the pre-crisis boom have been addressed.

Similarly, Europe will emerge from its current travails stronger if the weaknesses revealed by the recent financial crisis are properly identified and corrected through institutional innovation and reform. I am confident that this will be the case.

Seen from this continent, the recent crisis in European sovereign debt markets may be interpreted as a failure of the euro. But in Europe, the crisis is viewed differently. The problems we face today are the result of a flawed implementation of a fundamentally good idea. The bumpy ride of Economic and Monetary Union is largely the fault of the driver, not the vehicle. He has to learn from his mistakes and get some more practice - then he'll be a better driver. As for the vehicle, it needs better brakes, for even the best of drivers can occasionally make mistakes.

Europe continues to face some considerable challenges in managing the fallout from the sovereign debt crisis both for creditors and debtors. Sacrifices are required on all sides, if the Euro is going to remain a viable currency beyond the short to medium-term. The primary question remains as to whether the fiscal austerity being demanded of peripheral countries is simply too much for electorates to tolerate. For there part peripheral countries will have to continue to demonstrate a willingness to reform previously profligate public spending choices and to take a responsible attitude to regulation.

There has been a great deal of pessimism expressed about the prospects for the Euro. Its current value is probably too weak for strongly performing core economies and too strong for peripheral economies still struggling to grow. It is interesting that Lorenzo Bini Smaghi suggests that wage and commodity pressures in Asia could help to improve the Eurozone's competitive position and moderate the peripheral countries need for a sharply lower currency. I view this suggestion as a best case scenario for the Eurozone.

The Euro Trade Weighted Index reflects competing desires of the various member economies. It hit a medium-term peak in 2008 and remains in an inconsistent volatile range. The Index found support above 120 in June 2010 and has sustained a progression of higher reaction lows since. It is currently rallying towards the upper side of the short-term range and a sustained move below 126 would be required to question currently scope for some additional upside.