“The ghost of John Maynard Keynes…has returned to haunt us”, commented Martin Wolf (2008) in the wake of the global financial crisis, suggesting that the lessons from the father of macroeconomics were the best way to understand the crisis and to return the world economy to health. In fact, the severity of the crisis […]
photo: Elliott Brown Durand and Villemot (2016) examine two nncreasingly likely Eurozone scenarios – a single country exit and the complete breakup – concluding that while both scenarios should be taken seriously, their consequences should not be exaggerated. In particular, in the case Italy were to leave the euro – the scenario I will henceforth call […]
photo: Images Money Key takeaway – In Turkey, a coup attempt failed in less than 12 hours. President Erdoğan has declared that “the government is in control” and he is “not going to compromise”. What is next? Likely, Erdoğan’s popularity will increase, and constitutional changes will lead to a presidential system. Instability will continue, crackdowns […]
A hot topic[1] Claudio Borio and colleagues (2016) have recently posted a very interesting and thought-provoking comment on the currently highly debated topic of “helicopter money” (HM) and its use to fight secular stagnation in advanced economies. Their contribution does not take on the question of the efficacy of HM as a demand management tool […]
photo: European Parliament The bottom line is that unconventional monetary policies that move away from repairing markets or institutions to changing prices and inflationary expectations seem to be a step into the dark. (Rajan 2013) A step into the dark Following the announcement of last 10 March, as part of its enhanced monetary policy action, Mario […]
photo: Department of Foreign Affairs and Trade Financial inclusion and the fight against poverty Ravallion (2015) illustrates how mainstream thinking on poverty has changed over the last 200 years: from considering poverty as inevitable or even necessary for economic advancement, to viewing it as a social ill that can be avoided through public action. In fact, […]
photo: Chris Potter Secular stagnation and escape routes Paul Krugman and Larry Summers are having an interesting conversation on secular stagnation and the continuing decline in global real interest rates.[1] The ‘new secular stagnation hypothesis’ was first evoked by Larry Summers in his now famous speech at the IMF in 2013, and subsequent elaborations, to explain […]
A fiscal shock to Italy Recently on this blog, Brunello Rosa had submitted an interesting policy proposal to boost Italy’s GDP. Brunello’s proposal shares many analytical premises with the one we have articulated in a public appeal published at the end of last year, concerning the issuance of tax credit certificates as a means to […]
Macro policy coordination post crisis[1] The Great Recession has offered an important opportunity to discuss if and under what circumstances central banks might be required to coordinate their acts with governments in view of achieving specific macroeconomic objectives, such as fighting deflation and overcoming economic depression. Yet central bank independence has become such a strong […]
If Berlin, Frankfurt and Bruxelles continue to say “no”, there won’t be alternatives to Grexit, and that’s the end of the euro as we know it. At that point the euro architecture will have failed (in fact, it has already failed) and the very idea of Europe of Europe’s founding fathers will have died (in […]