Tax reform designed to improve the conditions for macroeconomic growth without weighing on government budgets has been the topic of recent debate in Europe. One proposal on the table suggests reducing taxes on wages whilst at the same time raising those on land and property. A new study uses a modern DSGE model to examine how, within this model framework, such a shift would impact on the aggregate economy and to what extent property owners and tenants would be affected.

In many areas, the ramifications of Brexit are not yet clear. It is likely, however, that the United Kingdom’s departure from the European Union will lead to a de-liberalisation of trade in services. A new study examines what this change could mean for individual EU Member States.

Many countries imposed tighter bank capital requirements following the 2008-09 financial crisis in order to repair the structural flaws in the banking system exposed during the crisis and thereby safeguard financial stability. A new study for the United States explores the macroeconomic effects of a tightening of bank capital requirements.

German sovereign bonds have become scarce on the European repo market over recent years. A new analysis investigates the impact of the Eurosystem’s monetary policy asset purchase programme on the repo market, and shows that central bank securities lending can help to counteract scarcity.

In the low-interest-rate setting, the Eurosystem’s accommodative monetary policy has been relying to a greater extent on non-standard measures and forward guidance on the future path of policy rates. A new paper examines how these measures have worked across the term structure and how market expectations have evolved during the phase of low interest rates. The results illustrate that the Eurosystem can continue to influence market participants’ interest rate expectations at the effective lower bound by way of unconventional monetary policy measures.