Zsolt Darvas
Zsolt Darvas, a Hungarian citizen, joined Bruegel as a Visiting Fellow in September 2008 and continued his work at Bruegel as a Research Fellow from January 2009, before being appointed Senior Fellow from September 2013. He is also a Senior Research Fellow at the Corvinus University of Budapest.
From 2005 to 2008, he was the Research Advisor of the Argenta Financial Research Group in Budapest. Before that, he worked at the research unit of the Central Bank of Hungary (1994-2005) where he served as Deputy Head.
Zsolt holds a Ph.D. in Economics from Corvinus University of Budapest where he teaches courses in Econometrics but also at other institutions since 1994. His research interests include macroeconomics, international economics, central banking and time series analysis.
Disclaimer of external interests
Featured work
Future of Work and Inclusive Growth Annual Conference 2023
Annual Conference of the Future of Work and Inclusive Growth project
Russian foreign trade tracker
Real effective exchange rates for 178 countries: a new database
Fiscal rule legislative proposal: what has changed, what has not, what is unclear?
The proposed new fiscal rules constitute a major improvement from the current fiscal framework but missed an opportunity to foster green investment.
The longer-term fiscal challenges facing the European Union
Since 2020, the European Union has suffered two large shocks, which have created new fiscal challenges for the EU.
What results can be expected from the EU Recovery and Resilience Facility?
The EU Recovery and Resilience Facility falls short against performance-based funding standards
The rules and guidance underpinning EU economic recovery funds seek inputs and outputs, not results; this has led to uneven use of results indicators
The ‘Green Golden Rule’ for the Green Transition
Given the need to reduce large budget deficits, what are some strategies for increasing public climate spending?
Banking turbulence is not a reason to pause monetary tightening
Despite calls for interest rate hikes to be paused, both the ECB and Federal raised rates- which was the right decision.
Collective bargaining is associated with lower income inequality
There is a negative correlation between collective bargaining coverage and inequality, but more research is needed to understand why.
Two crises, two continents: how the labour-market impacts have differed
The US economy was more resilient against the two recent global crises, while the EU did better in terms of jobs during and after the pandemic.
First lessons from the Recovery and Resilience Facility for the EU economic governance framework
This study draws out lessons for the future of the EU economic governance framework from certain aspects of the RRF design.
[email protected]: Inflation and unemployment with Joseph Gagnon
Invitation-only event with Joseph Gagnon, who will discuss the link between employment and inflation and its implications for macroeconomic policy.
European Union countries’ recovery and resilience plans
Global and regional Gini coefficients
Economy: Inflation peaking, recession looming?
In 2023 we might see positive economic surprises in Europe: better-than-expected growth and lower-than-expected inflation.
The impact of the Ukraine crisis on international trade
The direct aim of trade sanctions seems to have been achieved, while Russia’s capacity to finance the war from fossil fuel revenues is bound to shrink
Five lessons from the Recovery and Resilience Facility for future crisis-response instruments
Presented as a new departure in EU policy-making, the EU’s Recovery and Resilience Facility (RRF) is now in its second year of implementation.
A Green Fiscal Pact for the EU: increasing climate investments while consolidating budgets
Divisia monetary aggregates for the euro area
Inequalities, inclusion, and employment: a transatlantic perspective
What factors contribute to inequalities on both sides of the Atlantic, and how should policymakers address them?
The sometimes puzzling differences in transatlantic earnings growth
Low-skill workers have seen faster wage growth than high-skill workers in many EU countries, contrary to the United States.
How European Union energy policies could mitigate the coming recession
The European Union faces recession, but the way in which policymakers manage the energy crisis will determine its depth and duration.
Euro area monetary asset demand and Divisia aggregates
Tackling inflation: learning from the European Central Bank's six lapses
While mistakes unduly constrained rate hikes, gradual tightening is the right approach along with a new instrument to address energy bottlenecks.
The ECB’s monetary tightening: a belated start under uncertainty
A paper assessing the ECB policy errors that occurred in the last year, and the appropriateness of the current monetary policy stance of the ECB.
Russia’s huge trade surplus is not a sign of economic strength
Russia has recorded a record trade surplus, but more than half of its increase is due to the collapse of imports.
Bruegel Annual Meetings, 6-7 September 2022
The Annual Meetings are Bruegel's flagship event which gathers high-level speakers to discuss the economic topics that affect Europe and the world.
Legal options for a green golden rule in the European Union’s fiscal framework
Green public investment after COVID-19
How can the public sector meet the climate funding needs of the EU?
The implications for public debt of high inflation and monetary tightening
Expected increases in interest rates and reductions in real GDP growth rates will result in relatively small increases in public debt-to-GDP ratios.
Discretion lets Croatia in but leaves Bulgaria out of the euro area in 2023
Crucial decisions about whether a country can join the euro area depend on questionable discretionary decisions.
Technology, trade, work councils and income distribution: new insights from MICROPROD
Bold European Union action is needed to support Ukrainian refugees
Hosting Ukrainian refugees could cost European Union countries in excess of €40 billion this year. A dedicated EU fund is needed to manage the burden.
Close cooperation for bank supervision: The cases of Bulgaria and Croatia
In-depth analysis on the banking supervision cooperation in Bulgaria and Croatia prepared for the European Parliament's Committee on Economic and Mone
How to reconcile increased green public investment needs with fiscal consolidation
The EU’s ambitious emissions reduction targets will require a major increase in green investments. This column considers options for increasing public
Productivity in transformative times
This Microprod policy conference discussed how productivity is affected by globalisation and digitisation.
How has growth changed what countries get from the European recovery fund?
Adjustments to growth forecasts mean some countries will get 10% more than expected and others 20% less in grants from the EU Recovery and Resilience
The puzzle of European Union recovery plan assessments
Identical European Commission assessments that EU countries’ recovery plan cost justifications are ‘medium-quality’ undermine trust in the assessments
A European climate fund or a green golden rule: not as different as they seem
Spending and borrowing via a non-redistributive EU climate fund or under a well-designed green golden rule would result in similar project implementat
Timely measurement of real effective exchange rates
This paper contributes to the measurement of monthly consumer price index-based real effective exchange rates with two main novelties.
European Green Deal beyond the Brussels climate bubble
How can the European Green Deal be implemented beyond Brussels?
Fiscal policy and rules after the pandemic
What are the possibilities for shaping the new fiscal policy?
Including home-ownership costs in the inflation indicator is not just a technical issue
The ECB’s preferred method to include owner-occupied housing services in the inflation indicator would involve an asset price.
The New Euro Area Inflation Indicator and Target: The Right Reset?
Testimony to the Monetary Dialogue Preparatory Meeting of the European Parliament's Committee on Economic and Monetary Affairs (ECON).
The new euro area inflation indicator and target: the right reset?
In-depth analysis on the European Central Bank's revised inflation target prepared for the European Parliament's Committee on Economic and Monetary Af
An overview of the Recovery and Resilience Plans
Testimony before the European Parliament’s Committee for Budgetary Control (CONT) on the topic "Capacity for proper expenditure controls of the increa
A green fiscal pact: climate investment in times of budget consolidation
A fiscal exit strategy must be put in place when the EU is pursuing the major goal of cutting its emissions
An in-depth look at the Italian Recovery and Resilience Plan
Bruegel Annual Meetings, Day 2 - A discussion of the largest national recovery plan.
Bruegel Annual Meetings, 1-3 September 2021
The 2021 Annual Meetings gathered high-level speakers and participants to discuss how to recover from the crises brought on by the Covid pandemic
Will European Union recovery spending be enough to fill digital investment gaps?
The recovery facility will boost digital transformation, but questions remain whether it will be sufficient to achieve Europe’s digital ambitions.
How to spend it? A closer look at the recovery plans
In this event, participants will take a closer look at the recovery plans submitted by EU countries.
The Recovery and Resilience Fund: Accelerating the digitalisation of the EU?
How can new EU funds supplement national digital and green funding and EU funds from the standard seven-year EU budget to accelerate digitalisation?
The great COVID-19 divergence: managing a sustainable and equitable recovery in the European Union
Policymakers must act to prevent lasting divergence within the EU and to prevent scarring from the fallout from the pandemic.
Setting Europe’s economic recovery in motion: a first look at national plans
Plans for spending European Union recovery funds submitted by the four largest EU countries reflect rather different priorities. So far, only Italy is
Living standards and financial resilience across Europe
What has the impact of the pandemic on households’ financial resilience been, and how should policy makers respond?
Wealth distribution and social mobility
This report explores the distribution of household wealth in the EU Member States and analyses the role of wealth in social mobility.
The unequal inequality impact of the COVID-19 pandemic
Less-educated workers have suffered most from job losses in the COVID-19 pandemic, and it is quite likely there was a significant increase in European
The EU’s fiscal stance, its recovery fund, and how they relate to the fiscal rules
Joint EU borrowing to boost the recovery, if not treated as national deficit and debt, will substantially ease rules-based fiscal adjustment needs in
European Union cohesion project characteristics and regional economic growth
A new approach, which estimates 'unexplained economic growth', provides insights into the types of European Union cohesion projects that produce bette
The nonsense of Next Generation EU net balance calculations
Estimates of payments countries will receive from the Next Generation EU instrument can be made with some degree of precision. But estimating countrie
When the future changes the past: fiscal indicator revisions
The 2020 pandemic economic shock has led to reassessment of fiscal policy measures in 2018 and earlier, because of faulty measurement of unobserved ou
Innovative approaches to monitoring the risks and impact of COVID-19
What new innovative tools can we use to measure real-time economic and social risk?
COVID-19 has widened the income gap in Europe
Workers with low-educational levels suffered far worse than others in terms of COVID-19 related job losses during the first half of 2020 in the EU. Jo
Euro area accession countries in the context of the pandemic
Testimony before the European Parliament on the subject of euro area accession.
New life for an old framework: redesigning the European Union's expenditure and golden fiscal rules
Testimony before the European Parliament on the subject of EU fiscal policies.
Next Generation EU payments across countries and years
How much cake does everyone actually get and at what speed? This blogpost estimates the yearly Next Generation EU (NGEU) payments to each EU country a
The economic growth and income distribution implications of public spending and tax decisions
European Union countries can reduce inequality of opportunity through public spending and tax decisions. Broadly, the most effective approach includes
New life for an old framework: redesigning the European Union's expenditure and golden fiscal rules
This briefing paper focuses on two aspects of the EU fiscal framework: whether an expenditure rule would be more reliable than a structural budget bal
Will European Union countries be able to absorb and spend well the bloc’s recovery funding?
To help finance the post-coronavirus recovery, the European Union is raising large amounts to pass on to its members. But absorption of EU funds is ty
Relocating production from China to Central Europe? Not so fast!
Western European imports from central Europe have fallen dramatically, while imports from China fell much less, and had already recovered to pre-COVID
Having the cake, but slicing it differently: how is the grand EU recovery fund allocated?
The European Commission’s original allocation mechanism really favoured lower-income countries and to a large extent was based on pre-COVID economic d
The EU’s recovery fund proposals: crisis relief with massive redistribution
Poorer European Union countries and those hardest hit economically by the COVID-19 crisis could obtain up to 15% of their GNI in grants and guarantees
Three-quarters of Next Generation EU payments will have to wait until 2023
Because of hurdles in designing, approving and implementing European Union programmes, less than a quarter of the €438 billion in grants planned under
An uncompromising budget
Apart from decisive European Central Bank measures, the EU-wide response to the COVID crisis had been rather weak until the Commission put on the tabl
Forecasting exchange rates of major currencies with long maturity forward rates
This paper presents unprecedented exchange rate forecasting results based upon a new model which approximates the gap between the fundamental equilibr
The fiscal consequences of the pandemic
The likely economic depression triggered by coronavirus will pose a serious fiscal challenge to some euro-area countries. Given the special circumstan
The EU’s poverty reduction efforts should not aim at the wrong target
The EU cannot meet its ‘poverty’ targets, because the main indicator used to measure poverty actually measures income inequality. The use of the wrong
Recent euro-area house price increases are dissimilar to earlier housing booms
Current housing markets relative to those pre-crisis seem to be far less driven by mortgage credit, and the size of the construction sector has not in
From climate change to cyber attacks: Incipient financial-stability risks for the euro area
The European Central Bank’s November 2019 Financial Stability Review highlighted the risks to growth in an environment of global uncertainty. On the w
Resisting deglobalisation: the case of Europe
Trade and finance expanded in Europe after the financial crisis, while public support for globalisation is on the rise, supported by low unemployment.
How could net balances change in the next EU budget?
The gap between payments into the EU budget and EU spending in a particular country has importance when EU spending does not constitute European publi
How much will the UK contribute to the next seven-year EU budget?
This post estimates the United Kingdom’s net contribution to the 2021-2027 EU multiannual budget at close to €20 billion, taking into account the most
A new look at net balances in the European Union's next multiannual budget
Whenever the European Union’s budget is discussed, much of the political focus is on net balances – whether countries pay in more than they receive –
Who pays for the EU budget rebates and why?
A complex system of EU budget revenue corrections has been developed since the mid-1980s. I quantify their impacts: which countries pay and benefit fr
Cross-border, but not national, EU interregional development projects are associated with higher growth
Our calculations reveal that places where EU regional development projects bind together participants from different countries experience higher econo
With or without you: are central European countries ready for the euro?
The debate on euro adoption by central European EU countries has intensified in the last years. In this Policy Contribution the author does not review
Long term real interest rates fell below zero in all euro area countries
The 10-year real government bond yield, which is the nominal yield deflated by expected inflation, has fallen below zero in Italy and Greece, boosted
Why structural balances should be scrapped from EU fiscal rules
A prominent team from DG ECFIN of the European Commission challenged some of the criticisms of the EU’s methodology for estimating potential output an
Simple Rules for Better Fiscal Policies in Europe
Proposals to reform the euro area are on the agenda again. An overhaul of the complex set of European fiscal rules should be top priority on this agen
Questions to the economy commissioner-designates
European Commission President-elect Ursula von der Leyen disseminated her mission letters to commissioner-designates. In my opinion, the letters to ec
Bruegel Annual Meetings 2019
Bruegel's 2019 Annual Meetings will be held on 4-5 September and feature the launch of Bruegel's Memos to the New European Commission.
Bruegel Annual Meetings 2019, 4-5 September
The 2019 Annual Meetings featured the launch of Bruegel's memos to the new European Leadership, proposing how to deal with future policy challenges
Financial inclusion of SMEs for growth and job creation
How can increased access to finance benefit SMEs? What reforms are needed to encourage SME financial inclusion?
Uncertainty over output gap and structural-balance estimates remains elevated
The EU fiscal framework strongly relies on the structural budget balance indicator, which aims to measure the ‘underlying’ position of the budget. But
Effectiveness of cohesion policy: learning from the project characteristics that produce the best results
This study by Zsolt Darvas, Antoine Mathieu Collin, Jan Mazza, and Catarina Midões analyses the characteristics of cohesion policy projects that can c
A European atlas of economic success and failure
Economic growth was diverse across EU regions, yet it is crucial to control for region-specific factors in assessing growth performance. We find that
How to improve European Union cohesion policy for the next decade
This policy contribution investigates the performance of the design, implementation and effectiveness of cohesion policy, the most evaluated EU tool f
Global interpersonal income inequality decline: The role of China and India
Without China and India, global interpersonal income inequality in 143 countries was higher in 2015 than in 1988. Has the rest of the world really bec
EU enlargement 15th anniversary: Upward steps on the income ladder
Since their accession to the EU 15 years ago, the incomes of most central Europeans have increased faster than the incomes of longer-standing members