debating progressive politics in Europe and beyond
I was recently rather negative about the way the IMF frames the fiscal policy debate around the right speed of consolidation. In my view this always prioritises long run debt control over fiscal stimulus at the zero lower bound (ZLB), and so starts us off on the wrong foot when thinking about the current conjuncture. [...]
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, [...]
The establishment of the euro meant that for the first time in history, the national monetary policy of many European countries became pooled at a transnational level. Miguel Otero-Iglesias writes that a consequence of this is the movement of economic sovereignty towards Berlin and Brussels, and away from the Eurozone’s periphery. He argues that greater economic union [...]
I have written before about fiscal policy in the Netherlands. I have done so in part because that country has a strong macroeconomic tradition, and I regard their long standing fiscal council (CPB) as a model of how to try and get good economic analysis and evidence into the policy debate. It is therefore an [...]
Europe’s currency union is built on two key principles. The first is that the central bank must be independent of political control and its policies squarely focused on maintaining price stability. The second is that fiscal policy must be disciplined and never threaten price stability. Price stability, in turn, is the foundation for economic stability [...]
The Fiscal Compact of December 2011 On December 9th 2011 the European Council announced a new Fiscal Compact, as part of the series of measures undertaken in order to resolve the Eurozone sovereign debt and banking crises. It was incorporated into the Treaty on Stability, Coordination and Governance (TSCG), signed by 25 EU governments in [...]
It was Friday September 2nd, 2011 when the troika of Greece’s creditors left Athens after two weeks of negotiations that failed to bridge the gap between the Greek government and the representatives of the IMF, the European Central Bank and the European Commission. Their last unscheduled departure was in June 2011 when Papandreou’s government went [...]
There has been a surge of scholarly work on estimating fiscal multipliers and assessing their implications in the wake of the global financial and economic crises of 2007-2009. A large number of countries enacted fiscal stimulus packages in response to the twin crises, but an evaluation of their efficacy remains mired in controversy. Such controversy [...]
Japan has been put in the stocks by bien-pensant global political opinion. At the head of those throwing rotten fruit at the Japanese government, Bundesbank President and ECB board member Jens Weidmann. He has accused Prime Minister Abe of attacking the independence of the Japanese central bank and politicising the exchange rate, warning darkly of [...]
The head of Greece’s statistics agency, Andreas Georgiou, is to face a criminal inquiry. An ex-employee of the Hellenic Statistical Authority (ELSTAT), Zoe Georganta, has accused him of colluding with the European Union’s statistical arm, Eurostat, to inflate Greece’s deficit figure for 2009, thereby justifying Greece’s EU-IMF bailout, signed in May 2010, and its drastic [...]
As world business leaders gather in Davos, a long-overdue paradigm shift in monetary policy – subordinating the targeting of inflation to the targeting of growth – is slowly taking shape. In what some call a “reverse Volcker moment,” US Federal Reserve Chairman Ben Bernanke has specified a target of 6.5% unemployment alongside his inflation target; [...]
Now it has happened. The first major industrialised country has had enough of stagnation and is trying an alternative economic policy. Japan’s new government, run by Shinzo Abe, has announced a significant public spending programme and put political pressure on the central bank, the Bank of Japan, to do its part to change course by [...]
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