We study the e¤ects of Central Bank transparency on in ‡ation and the output gap. We thus …rst identify a small analytical model which concludes that transparency a¤ects the variability of in ‡ation and output and not their average levels. Then we examine whether this conjecture holds empirically, employing the recently derived index of transparency by Eij¢nger and Geraats. The empirical …ndings con…rm that the averages are not a¤ected by transparency. It does seem to explain however, about 50% of the variability in in ‡ation. The relation between transparency and output volatility is less clear but appears to be positive rather than negative.

Complementing Europe's bank-based system with deeper capital markets and more cross-border financial integration promises benefits, but despite long-running debate and policy action, financial system change remains slow.Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Lower costs and potentially better consumer experiences could be the driving forces.However, empirically, fintech remains at a small scale, especially in the European Union. Even the largest fintech market, in China, is of marginal size compared to overall financial intermediation. In the EU, much of fintech is concentrated in the United Kingdom.We argue that policymakers need to consider four questions urgently: (1) Develop a European or national fintech market? (2) What regulatory framework to pursue? (3) Should supervision of fintech be exercised at the European level? (4) What is the overall vision for the EU's financial system? Getting the answers to these questions right at an early stage of market development would be an opportunity to shape a stable and cost-efficient financial system. In contrast, late action could mean that Europe loses out to foreign competitors and misses an opportunity to improve financial intermediation in Europe.

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We introduce heterogeneous expectations in a standard housing market model linking housing rental levels to fundamental buying prices. Using quarterly data we estimate the model parameters for eight different countries, US, UK, NL, JP, CH, ES, SE and BE. We find that the data support heterogeneity in expectations, with temporary endogenous switching between fundamental mean-reverting and trend-following chartists beliefs based on their relative performance. For all countries we identify temporary house price bubbles, amplified by trend extrapolation, and crashes reinforced by fundamentalists. The qualitative predictions of such non-linear models are very different from standard linear benchmarks, with important policy implications. The fundamental price becomes unstable, e.g. when the interest rate is set too low or mortgage tax deductions too high, giving rise to multiple non-fundamental equilibria and/or global instability. * Views expressed are our own and do not reflect those of the institutions with which we are affiliated.