We critically review and discuss the major decisions elements of the important July 2022 ECB Governing Council meeting.

We discuss whether the ECB tightening path implied by current market prices is sufficient for getting inflation under control in the Euro Area. We highlight the role played by the neutral real rate, the slope of the Phillips curve and inflation expectations for inflation dynamics going forward.

The ECB working paper by Marta Banbura und Elena Bobeica that we mention in the podcast is available here:

https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2471~fc87caada8.en.pdf?9306b59fe8f49ee4e6e926121283ac85

Periods of high real interest rates are historically associated with high productivity growth and a high marginal product of capital. We discuss to what extent this implies that the expected increase in real interest rates due to ECB tightening measures will increase the marginal product of capital and productivity growth.

We talk with Klaus Regling, Head of the European Stability Mechanism (ESM), about the ESM's financial support programs, the OMT program, conditionality in these programs, and about fiscal rules in Europe.

We dicuss whether Euro Area sovereign bond spreads behave in unusual ways, whether or not the ECB should do something about them, and the potential pitfalls of ECB interventions.

The academic paper mentioned in the podcast is available here: https://doi.org/10.1515/ger-2018-0094

We review the ECB decision to end asset purchases and to embark on an interest rate hiking cycle, in light of record high Euro Area inflation rates. We focus on the likely path forward for interest rates and the challenges associated with seeking to contain interest rate spreads across Euro Area member countries.

The share of national income going to workers has been trending downwards over time in many advanced economies, including in Europe. We discuss to what extent this development is really there in European data and what economic mechanism can account for it.

We draw on insights provided by the following articles:

Gutierrez & Piton, "Revisiting the Global Decline in the (Non-Housing) Share of Income", AER Insights, 2021, https://www.aeaweb.org/articles?id=10.1257/aeri.20190285

Kehrig & Vincent, "The Micro-Level Anatomy of the Labor Share Decline", Quarterly Journal of Economics, 2021, https://doi.org/10.1093/qje/qjab002

DeLocker and Eeckhout, "Global Market Power", working paper, 2020, https://crei.cat/wp-content/uploads/2020/10/GLOBAL.pdf

We discuss with Lars Feld about

• a recent paper published by the German Finance Ministry outlining guideposts for economic and fiscal policy

• the German view on the reform of fiscal rules in Europe

• the role of gas and oil embargos

• the outlook on the German Green transition

We discuss the main indicators providing information about the short-term Euro Area economic outlook. We also discss why forecasting is generally difficult and why standard forecasting tools do not perform well during the current period and what can be done about it.

We mention two academic papers:

"Nowcasting with Large Bayesian Vectorautoregressions", by Cimadomo, Giannone, Lenza, Monti & Sokol, ECB Working Paper No. 2453, 2020

"How to Estimate a VAR after March 2020", by Lenza & Primiceri, ECB Working Paper No. 2461, 2020

We discuss with Mark Schieritz about the political approach, personal traits, and recent political decisions of Germany's new Chancellor Olaf Scholz.

Mark Schieritz is a leading journalist at Germany's weakly newspaper "Die Zeit" and the author of a recent book about Germany Chancellor Olaf Scholtz, titled "Olaf Scholz - Wer ist unser Kanzler?".

We discuss how ECB policy will be affected by

#1 the likely acceleration of the Green transition, triggered by the Russian invasion & high prices for fossil fuel, and

#2 the international economic decoupling between Western economies and Russia/China, as triggered by the same geopolitical tensions.

We argue that both developments will require an increase in real interest rates in the short term, even if they may lower them in the long-term.

The election behavior of French voters has undergone tectonic shifts. We discuss what this mean for the upcoming presidential elections, for future French elections and for the European project. We also discuss the main economic and fiscal challenges that any future French President will have to confront.

We discuss with Russia expert Sergei Guriev (Sciences Po) about his new book "Spin Dictators", Russia's imperial ambitions, its economic situation at home, Putin's regime, opinion polling in a dictatorship and the economic relevance of energy sanctions for Russia.

Sergei's new book is available here:

https://press.princeton.edu/books/ebook/9780691224466/spin-dictators

We discuss with Princeton Professor Markus Brunnermeier the changes in the payment landscape for firms and households and the potential role of a digital euro in these transactions and for securing monetary independence of the Euro Area.

The EU parliament report by Markus Brunnermeier and Jean-Pierre Landau that mention in the podcast is available here:

https://www.europarl.europa.eu/thinktank/en/document/IPOL_STU(2022)703337

We discuss the likely economic consequences for the Euro Area asscoiated with an embargo on Russian energy imports.We also discuss and draw on results from a recent policy paper:

"What if? The Economic Effects for Germany of a Stop of Energy Imports from Russia"

which is available here:

https://www.econtribute.de/RePEc/ajk/ajkpbs/ECONtribute_PB028_2022.pdf

We review the latest decisions decission of by the ECB in March 2022 and dicuss the special the role of household inflation expectations.

The paper by D'Acunto, Malmendier, Weber mentioned in the podcast can be accessed here:

https://faculty.chicagobooth.edu/-/media/faculty/michael-weber/what-do-the-data-tell-us.pdf

We discuss with former ECB Vice-President Vítor Constâncio the Euro Area outlook and the challenges it poses for the ECB in light of the recent invasion of Ukraine by Russian forces.

We discuss how the geopolitical & economic uncertainty associated with the Russian invasion of Ukraine affects the economic outlook.

The 3 academic papers we mention in the podcast are:

"The World Uncertainty Index", by Ahir, Bloom and Fuceri, https://www.nber.org/papers/w29763

"The Impact of Uncertainty Schocks", by Bloom, https://doi.org/10.3982/ECTA6248

"Quantifying Confidence" by Angeletos, Collard and Dellas, https://doi.org/10.3982/ECTA13079

Martin Arnold, Bureau Chief of the Financial Times' Frankfurt office, provides his view about ECB communication, ECB policy and individual members of the ECB Governing Council.

We discuss - in an accessible way - the main elements making inflation forecasting a difficult business. We thereby draw on the latest insights from the economics and forecasting literatures.

We discuss with Xavier Ragot (President of the OFCE Institute in Paris) the economic and political challenges in France that the next French President will have to deal with.

We discuss how the the prospective end of asset purchases by the European Cental Bank is likely going to affect output, inflation and financial conditions going forward.

We discuss the inflationary pressures generated from future carbon tax hikes and stricter emission caps in the Euro Area.

Frank Smets has held key positions at ECB over the past 22 years, amongst others as Mario Draghi's personal advisor and currently as Director General Economics. We discuss with Frank about what has changed at #ECB over the past 20 years and about the challenges that lie ahead.

We review and discuss the monetary policy decisions taken by the European Central Bank on December 16, 2021 and also the latest European macro data.

How does Italy get out of the pandemic slump? What prospects do Mario Draghi's reform projects hold for the future of Italy? We discuss with Roberto Perotti, Professor of Economics at Bocconi University and a former advisor to Italian Prime Minister Matteo Renzi.

Euro Area inflation has been rising, but bond yields remained surprisingly low. We discuss what's behing this with Natixis interest rates strategist Jean-Christoph Machado.

We discuss the main features of the "treaty" agreed between the new German coalition partners (Social Democrats, Greens & Liberals) and also the latest Euro Area macro data .

We discuss whether a reversal of high private sector savings rates will generate demand pressures and fuel further inflation. We also summarize the latest Euro Area macro data.

We discuss with Stanford Professor Hanno Lustig about what makes assets safe, reviewing some of the problematic features in the setup of safe assets in the Euro Area.

We discuss the latest European macro data and indicators that allow assessing the tightness of the Euro Area labor markt and the potential for future wage pressures.

We discuss the latest European macro data and interview energy expert Joel Hancock (Natixis) about the drivers and the outlook for the oil and gas markets in Europe.

We discuss the latest European macro data and what to expect of the upcoming ECB meeting.

We discuss the latest European macro data and what economic theory can tells us about how monetary policy should respond to stagflationary situations.

We discuss the latest European macro data and the and challenges awaiting the new German government that is currently being formed.

We discuss the outcomes of the 2021 ECB Strategy Review with Prof. Lucrezia Reichlin from London Business School.

We discuss the latest European macro data and how the digitalisation push induced by be the pandemic might affect productivity and inflation going forward.

We discuss the latest European macro data and the prospects for the upcoming German federal elections, with an eye on what they might imply for Europe.

We discuss the latest European macro data and how fiscal rules in the Euro Area can be meaningfully reformed.