debating progressive politics in Europe and beyond
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 [...]
Carmen Reinhart and Kenneth Rogoff have defended their work of the public debt-growth against their critics in the New York Times. It is not convincing. They repeat their claim that they always insisted that they were talking about correlation, even if less careful or interested parties made strong claims about causation. But this is belied [...]
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 [...]
Average wages around the world The global financial crisis had significant negative repercussions for labour markets in many parts of the world. The most significant impact has been on employment figures. But the ILO Global Wage Report 2012/13, entitled “Wages and Equitable Growth”, shows that the weakening of the global recovery in the two years after [...]
It’s surprising how the language of growth diagnostics and binding constraints springs up in all kinds of unexpected places. The latest example is the IMF’s new report on jobs and growth. The IMF’s analysts say all the usual things about the primacy of macroeconomic stability and fiscal sustainability – no surprise there. But then we get a [...]
A simultaneous increase in the profit share by 1% point in the major developed and developing countries, leads to a 0.36% decline in global GDP. The dramatic decline in the share of wages in GDP in both the developed and developing world during the neoliberal era of the post-1980s has accompanied lower growth rates at [...]
An interesting discussion at the Council on Foreign Relations. Willem H. Buiter, chief economist at Citigroup, discusses break-up risk, sovereign debt restructuring, bank creditor bail-ins, debt mutualization, austerity, and growth in the Eurozone.
With much of the global economy apparently trapped in a long and painful austerity-induced slump, it is time to admit that the trap is entirely of our own making. We have constructed it from unfortunate habits of thought about how to handle spiraling public debt. People developed these habits on the basis of the experiences [...]
Since the second half of 2012, financial markets have recovered strongly worldwide. Indeed, in the United States, the Dow Jones industrial average reached an all-time high in early March, having risen by close to 9% since September. In Europe, European Central Bank President Mario Draghi’s “guns of August” turned out to be remarkably effective. Draghi reversed the [...]
When I grew up in Texas, a common saying was “free advice is worth what it costs you”. The recent eBook, Towards a European Growth Strategy, represents a clear exception to that rule, and offers a welcome opportunity to open fruitful debate on economic policy in Europe. Consistent with the intent of that study, and [...]
Last week’s Eurostat press statement on unemployment is devastating. In December 2012, unemployment stood at 11.7% in the Euro area and 10.7% in the EU-27. In both areas, unemployment was is significantly up from December 2011.In the whole of Europe, 25.9 million people are unemployed of which 5.7 million are youngsters. Greece and Spain, recording [...]
All Content