The Ademu workshop on Policies for Economic Stability: Lessons and the Way Forward took place in Galatina, Italy in August, jointly organised with representatives the European Central Bank and Banque de France and sponsored by the City of Galatina. 

With academics from Europe and the US joining the organisers and Ademu researchers, the workshop focused on the possible synergies between different policies for the pursuit of economic stability.

One of the main consequences of the outbreak of the financial and Euro crises has been a dramatic increase of large scale unemployment in the Euro-area. This was subsequently followed by a period of tight credit markets and fiscal austerity. A lot of the questions posed by these crises remain unanswered, and the workshop presented and discussed new research related to this questions with a focus on three main topics.

The first part of the workshop was devoted to the issue of how to design an unemployment insurance mechanism that preserves individual incentives to increase productivity and, at the same time, reduces the recourse to precautionary savings. The second focused on recent lessons from the US credit market instability and the following regulation that aimed at fostering market liquidity without embarking in excessive risk-taking. Finally, the use of fiscal policy as an automatic stabilizer of aggregate unemployment and financial instability, and the consequences of its impairment in the while of the recent crises were discussed.

You can see the original programme and list of speakers here,  with papers that were presented at the workshop linked to below.

On the design of a European Unemployment Insurance Mechanism

Talent Discovery, Layoff Risk and Unemployment Insurance

Regulating Household Leverage

Optimal Debt Maturity and Firm Investment

The Mortgage Rate Condundrum

Hanging off a cliff: fiscal consolidations and default risk

The Heterogeneous Effects of Government Spending: It’s All About Taxes