The Plot Against France

Krugman, Paul. On Friday Standard & Poor’s, the bond-rating agency, downgraded France. The move made headlines, with many reports suggesting that France is in crisis. But markets yawned: French borrowing costs, which are near historic lows, barely budged. Πηγή: The New York Times πλήρες κείμενο

The perils of private-sector deleveraging in the Eurozone

Bornhorst, Fabian, Marta Ruiz Arranz. Private and public debt in the Eurozone increased since the 2000s, and especially so in certain countries. This column presents evidence that high levels of private and public debt, together with deleveraging of all sectors, are especially harmful for economic growth. Private sector debt is more detrimental to growth than public […]

Unemployment, labour-market flexibility and IMF advice: Moving beyond mantras

Blanchard, Olivier, Jaumotte, Florence & Loungani, Prakash. The state of labour markets in advanced economies remains dismal despite recent signs of growth. This column explains the IMF’s logic behind the advice it provided on labour markets during the Great Recession. It argues that flexibility is crucial both at the micro level, i.e. on worker reallocation, and […]

Sovereigns versus banks: Crises, causes and consequences

Jordà, Òscar, Schularick, Moritz  & Taylor,  Alan. In the aftermath of the global financial crisis, few would dispute the risks of excessive borrowing. But which debts should one worry about – public or private? This column presents new research on the interplay of public and private debts since 1870 in 17 advanced economies. History demonstrates that […]

The Greek Debt Restructuring: An Autopsy

Zettelmeyer, Jeromin, Trebesch,  Christoph & Gulati, Mitu. The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief—over 50 percent of 2012 GDP—with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key creditors. But it […]

Messing up the next Greek debt relief could endanger the Eurozone

Wyplosz, Charles. Greece is in dire straits; it will need more debt relief. This column argues that Greece is suffering because northern EZ countries kicked the can down the road by forcing crisis countries to borrow rather than restructure their debts early on. It is time for the ‘generous’ lenders to face the consequences of their […]

A New Greek Test for Europe

Mody, Ashoka. Over the last year, it has been easy to lose sight of the Greek debt crisis. Brimming with official funds, Greece was apparently on the mend. Though privatization plans lagged, the Greeks won high marks for doubling down on fiscal austerity. In Europe’s summer of quiet triumphalism, ever-lower expectations were easy to beat. […]

Latvian Adventures

Krugman, Paul. The paper by Blanchard, Griffiths, and Gruss is here (pdf). Some bemusement among the non-international-macro types about why a long session devoted to a country roughly the same size as either Nebraska or Brooklyn, take your pick. But a good discussion all the same. My take: What to Make of Latvia? Πηγή: The […]

Rich Man’s Recovery

Krugman, Paul. A few days ago,The Times published a report on a society that is being undermined by extreme inequality. This society claims to reward the best and brightest regardless of family background. In practice, however, the children of the wealthy benefit from opportunities and connections unavailable to children of the middle and working classes. And […]

The Post-Crisis Global Economy in Three Words

Pisani-Ferry,  Jean. Five years have passed since the collapse of the American investment bank Lehman Brothers triggered financial mayhem and marked the onset of the Great Recession. Though the dust may not have fully settled, three catchwords sum up what we have learned so far – and what remains to be done. Πηγή: πλήρες κείμενο