debating progressive politics in Europe and beyond
As I briefly listened to the radio the other morning, I heard the new head of the TUC (Trades Union Congress) talking about macroeconomic policy. She said the government’s policy of austerity has failed, and we need more investment in jobs. The interviewer asked whether this would mean more borrowing by the government. She avoided [...]
Undoubtedly, the main onus of responsibility for the current global crisis is on the financial system (although the crisis erupted against the background of global economic imbalances and of income distribution within countries becoming increasingly more unequal), and not on a lack of fiscal discipline. Nevertheless, since the end of the most acute phase of [...]
The source of the Italian economic crisis is, needless to say, far more global than Italian. An economy so vastly dependent on industrial exports could not possibly remain unaffected by the depressive consequences of the crisis and, even more so, by the stifling results of the austerity measures imposed on all over the EU, including [...]
Why do neoclassical economists want the budget to be balanced and people to save more? Because they believe that “saving finances investment”. They believe that in order to finance investment, somebody has to have saved beforehand. This might sound intuitive, but it is one of the biggest (and unfortunately oldest) fallacies in economics. Saving never [...]
Today’s social-democrats are frightened by the notion of state-led investment. Keynes famously argued in the General Theory ([1936] 1974 p. 376) that maintaining long-term growth meant that the investment function must be largely – in his word’ somewhat comprehensively’ – taken over by the state. Indeed, he thought the state should directly or indirectly control [...]
The aftershocks of Ireland’s property crash continue to reverberate through the economy. The sharp decline in construction activity and property prices from their respective peaks has devastated the construction sector and seriously undermined the Irish banking system. The next few years will continue to be difficult for the Irish economy and the outlook for growth [...]
As Olympic mania swept the world in recent weeks, it transported the host country, Great Britain, to a rare display of public exultation. Indeed, the successes of “Team GB” produced an upsurge of patriotic rejoicing akin to victory in war. Britain finished third in the gold medal count, behind the United States and China, much [...]
The opening up of trade in a multilateral trading system has provided one of the major pillars for economic growth enjoyed by developed countries in the last century. Although emerging countries were latecomers to international trade, they too have significantly benefited from trade liberalisation. Export oriented economies have advantages from improved allocation of scarce resources, [...]
The S&P stock index now yields a 7% real (inflation-adjusted) return. By contrast, the annual real interest rate on the five-year United States Treasury Inflation-Protected Security (TIPS) is -1.02%. Yes, there is a “minus” sign in front of that: if you buy the five-year TIPS, each year over the next five years the US Treasury [...]
Voters in Greece, France and the United Kingdom have sent a clear signal in the past month that they want governments to give priority to jobs and opportunities as well as reducing deficits and debt. Lord Nicholas Stern argues that unleashing the low-carbon economy could achieve these goals. Framed by credible and stable policies, the European Union [...]
What trade unions across Europe have been warning against is now happening: far from bringing public finances under control, the strategy of European wide austerity is pushing the economy back into recession. While the European Commission, in its latest spring forecast, tries to give this a positive spin by talking of a ‘mild’ recession with [...]
In March Kenya discovered oil. Even before it has proved to be commercial, and years before the money will flow, oil has already had an impact: by April public servants were demanding a large wage increase. Oil discoveries are psychological earthquakes: people imagine that good times have arrived. Such a narrative is the default option for [...]
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