Eurobonds are needed to anchor macroeconomic stability and offer a safe path out of the coronavirus storm.
Why We Need European Safe Assets
It has become conventional wisdom that low and stable inflation contributes to economic stability and most central banks in the advanced nations pursue some type of inflation targeting (Svensson 1997). Less widely acknowledged, although arguably more intuitive, is the fact that low-risk government bonds also provide an essential stability anchor for market economies (DeGrauwe/Ji 2013). […]