debating progressive politics in Europe and beyond
The doctrine of imposing present pain for future benefit has a long history – stretching all the way back to Adam Smith and his praise of “parsimony.” It is particularly vociferous in “hard times.” In 1930, US President Herbert Hoover was advised by his treasury secretary, Andrew Mellon: “Liquidate labor, liquidate stocks, liquidate the farmers, [...]
In my previous column, I have argued that prolonged negative output gaps in the Euro Area will reduce potential GDP, long-term growth and employment, because the lack of demand will disincentivize investment. What Europe needs, especially the south, is closing the output gap not by reducing supply but by increasing demand. The question is then, [...]
I was interviewed about the recent European GDP figures by CCTV America recently. This is what I had to say.
The G20 Leaders Declaration at the Toronto Summit (June 2010) endorsed an ambitious agenda of ‘structural reforms’ cutting across both labour and product markets that would lift global output significantly, create ‘tens millions more jobs’, sustain poverty reduction and reduce global imbalances significantly.[1] The latest (18-19 April, 2013) Communique of Finance Ministers and Central Bank [...]
The European Union owes its existence to the efforts of political elites who could count on the passive consent of their more or less indifferent populations as long as the peoples could regard the Union as also being in their economic interests, all things considered. The Union has legitimized itself in the eyes of the [...]
Over the last decade, as the “great moderation” was transformed into the “great recession” it would not be a mistake to portray the growth process of the Turkish economy as “a gradually-deflating balloon, subject to erratic and irregular whims of the markets”. Yet, if so, the real question becomes: what is the source of this [...]
Austerity is the curse of our time. Governments cut spending, raise taxes, reduce employment and lower wages in the hope of better times. The consequences are dire. 26 million people are unemployed in the European Union. Youth unemployment is 6 million, in Spain and Greece more than 50 percent. [1] A whole generation is desperately [...]
Economic forecasters exist to make astrologers look good. Most had forecast growth of at least 3 percent (on an annualized basis) in the first quarter. But we learned this morning (in the Commerce Department’s report) it grew only 2.5 percent. That’s better than the 2 percent growth last year and the slowdown at the end of the [...]
It is a measure of the state we are in that the latest quarterly growth number for the UK, at 0.3% (1.2% annual rate) for 2013Q1, should be regarded as a political plus for the Chancellor. [See postscript at end.] So here is the first chart: This extremely weak growth from a starting point of a deep [...]
In 2001, Goldman Sachs’ Jim O’Neill famously coined the term BRIC to characterize the world’s four largest developing economies – Brazil, Russia, India, and China. But, more than a decade later, just about the only thing that these countries have in common is that they are the only economies ranked among the world’s 15 largest (adjusted for [...]
Japanese Prime Minister Shinzo Abe’s program for his country’s economic recovery has led to a surge in domestic confidence. But to what extent can “Abenomics” claim credit? Interestingly, a closer look at Japan’s performance over the past decade suggests little reason for persistent bearish sentiment. Indeed, in terms of growth of output per employed worker, [...]
In the last four weeks, I have traveled to Sofia, Kuala Lumpur, Dubai, London, Milan, Frankfurt, Berlin, Paris, Beijing, Tokyo, Istanbul, and throughout the United States. As a result, the myriad challenges facing the global economy were never far away. In Europe, the tail risk of a eurozone break-up and a loss of market access [...]
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