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Fiscal Activism in the Euro Area and in Other Advanced Economies: New Evidence (ECB, 53 page read) The ECB finds that discretionary fiscal policy hasn’t helped to stabilise European economies over the past 20 years. Generally, policy is pro-cyclical and often counteracted by higher long-term interest rates and debt-to-GDP ratios. [Bearish European growth/stocks]
Measuring the Cost of Bailouts (Annual Review of Financial Economics, 23 page read) The paper calculates that the total direct cost of the 2008 crisis-related bailouts in the US at around $500 billion, or 3.5% of 2009 GDP. So the bail-outs were not fully repaid, but also it didn’t run into the trillions of dollars. [Bullish banks]