The flawed economics of the Competitiveness Pact: Austerity’s inauspicious historical precedents | Felix Salmon | Analysis & Opinion. One of the best aspects of being a journalist is that you get to talk at length to the most knowledgeable and interesting experts on just about any subject you can think of. For me, yesterday was a prime case in point: a long and fascinating lunch with James Macdonald, the author of my favorite book on the history of sovereign debt.
Turns out he also has a microscopic vineyard in Tuscany, so the conversation ebbed wonderfully from economics to wine and back. Macdonald has an economic historian’s view of the current austerity debate, and he was very clear: if you look at the history of countries trying to cut and deflate their way to prosperity while keeping their currencies pegged, it’s pretty grim — all the way back to Napoleonic times. Sometimes, the peg is gold. For a good example of the destructive abilities of that particular peg, look at the UK in the 1920s, which Macdonald says was arguably worse than the US in the 1930s: shallower, to be sure, but substantially longer. Comment & analysis / FT Columnists - A misguided German narrative of the crisis. Lars E.O. Svensson | vox - Research-based policy analysis and commentary from leading economists. Lars E.O. Svensson is Deputy Governor of Sveriges Riksbank (the central bank of Sweden) since May 2007 and Professor of Economics at Princeton University since the fall of 2001 (on leave 2007-).
He was Professor of International Economics at the Institute for International Economic Studies, Stockholm University during 1984-2003. He has published extensively in scholarly journals on monetary economics and monetary policy, exchange-rate theory and policy, and general international macroeconomics. He has lectured and visited at universities, central banks, and international organizations in many countries. He was active as advisor to Sveriges Riksbank during 1990-2007 and was a member of the Monetary Policy Advisory Board and the Economic Advisory Panel of the Federal Reserve Bank of New York until his appointment as Deputy Governor of the Riksbank.
Monetary policy and the models. 101124e.pdf (application/pdf Object) Why Germany Prefers Regulation to Stimulus. Neoliberalism vs. Ordoliberalism essays. Neoliberalism vs. Ordoliberalism “My notion of democracy is that under it the weakest should have the same opportunity as the strongest.”- Mahatma Gandhi. In this paper, I will show the differences between two types of liberal thought, Neoliberalism and Ordoliberalism, that have attempted to achieve Gandhi’s notion.
Merriam-Webster defines Neo-liberalism as “a liberal who de-emphasizes traditional liberal doctrines in order to seek progress by more pragmatic methods.” Liberalism can refer to any social, economic, or even religious idea, whereas “neo” refers to a new form of an idea. The first type of liberalism gained recognition in Europe in 1776 by Adam Smith when he published his classic novel, The Wealth of Nations. More sample essays on Neoliberalism vs. Deregulation not only funneled wealth upward, but also put the consumer and the worker in harm's way. Lars E.O. Svensson. New Ekonomistas post (in Swedish). This is an English translation. Sweden has deflation, that is, negative inflation. According to Statistics Sweden, CPI inflation in March was minus 0.6 percent. As we can see in the figure below, CPI inflation has been around zero since November 2012, and since January 2014 it has been negative. CPIF and HICP inflation i March was zero and minus 0.4 percent, respectively.
We see that CPIF and HICP inflation has been on a downward trend since the summer of 2013. Continue reading English translation of Ekonomistas post (in Swedish). At the latest policy meeting and decision, the Riksbank repeated its statements that a lower policy rate would increase the risks associated with household indebtedness. Continue reading Comments for International Journal of Central Banking, revised version of comments given the 2013 IJCB conference “Inflation Targeting and Its Discontents”, September 6-7, 2013, Warsaw, hosted by Narodowy Bank Polski (National Bank of Poland). How German domestic politics gets in the way of crisis resolution. Germany's choice. European banking system needs redesign to prevent another crisis - Analysis, Opinion. It calls, as these documents invariably do, for greater integration of European economic policy. The main proposals are for closer harmonisation of tax and spending policies, including constitutional limits on borrowing, a common approach to corporation tax, higher retirement ages in state pension systems and an end to wage indexation.
The theme is a more competitive Europe with better fiscal discipline. The plan has already received a frosty welcome. Everyone is in favour of better fiscal discipline, preferably at some distant future date, but states which have wage indexation want to keep it, higher retirement ages are unpopular in countries where the current figure is low and member states with attractive rates of corporation tax ( Ireland is not the only one) want to keep them.
The crisis in Europe, with the possible exception of what has happened in Greece, does not have its origins in loose budgetary policy. These growing resources were deployed in the acquisition of dud assets. Sarkozy's grandstanding on our corporation tax misses the point - Analysis, Opinion. This, he feels, should be reciprocated through Ireland altering a long-established domestic taxation policy, a prerogative unambiguously reserved to the member states under the European treaties and the subject of an explicit commitment at the time of the second (successful) Lisbon referendum. He went on to assert his respect for the independence of his ' Irish friends', a group likely to have dwindled over the last few days. From an Irish perspective, what looks to him like financial assistance from Europe could as readily be characterised as a bailout of European investors foolish enough to lend to Anglo Irish Bank and other insolvent banks, courtesy of the Irish taxpayers.
The markets having declined to finance this commitment on top of the Irish sovereign debt, our European friends have kindly provided 'assistance' in the form of loans at a mark-up of three per cent on the cost of funds. Colm McCarthy lectures in Economics at University College Dublin. Sunday Independent. Don't worry about the euro. Who's Afraid Of The Euro ? Paul Krugman I once attended a conference at which a senior Japanese official made an impassioned speech about the need to establish the yen as an international reserve currency. When my turn came, I explained that this was silly; even if the yen did become a reserve currency, it would make virtually no difference to Japan or to anyone else. At the end of the session, the moderator thanked me for my contribution--which, he said, emphasized once again the crucial importance of the yen's role as a reserve currency.
And so it was inevitable that the coming of the euro --the common European currency that seems set to be introduced next year, and that may eventually challenge the dollar's dominance--would inspire irrational fear. Well, not to worry. But doesn't the dollar's special role give us some advantage? What about our ability to borrow in dollars, to sell dollar- denominated bonds to foreigners?