Delaying Tactics No Help in Greek Tragedy
Hannon, Paul. Not for the first time during the slow-motion car crash that is the euro zone’s fiscal crisis, policy makers are tying themselves in knots in an effort to minimize collateral damage. They fret over whether ratings agencies and other self-appointed market regulators will define investors’ participation in a new Greek funding package as […]
The Long and Winding Road to Recovery
Blanchard, Olivier, Vinals, Jose & Cottarelli, Carlo. The global economy has bounced back strongly from the nadir of 2009, but growth is still uneven and recent data in key advanced economies have been disappointing. So where is the global economy headed? To be sure, the recovery was not expected to be smooth: historically, cleaning up […]
Political institutions and the curse of natural resources
Cabrales, Antonio & Esther, Hauk. The natural-resource curse is now a staple in the development economist’s diet. Natural resources have tended to lead to lower economic growth, except in democratic countries or those with robust institutions. This column presents a political economy model to explain this phenomenon, focusing on the threat of revolutions. There is nothing […]
Legal Institutions, Innovation and Growth
Anderlini, Luca, Felli, Leonardo, Immordino, Giovanni & Riboni, Alessandro. Which legal institutions are best equipped to deal with the challenges of new technologies? The authors of CEPR DP8433 find a tradeoff between commitment and flexibility in the evolution of legal systems. Rigid legal systems, they argue, cope best with new technological developments because they help resolve credible […]
A Post-Crisis World of Risk
Spence, Michael. The global economy’s most striking feature nowadays is the magnitude and interconnectedness of the macro risks that it faces. The post-crisis period has produced a multi-speed world, as the major advanced economies – with the notable exception of Germany – struggle with low growth and high unemployment, while the main emerging-market economies (Brazil, […]
Money Magic
Rajan, Raghuram. Economic growth in the United States seems to be slowing again. This might reflect temporary factors, like the Japanese tsunami, which disrupted supply chains and caused some factories to suspend operations. Also, high oil prices have taken a toll on disposable income, impeding growth in consumption demand. This has led to a build-up […]
Inequality, Development, and the Stability of Democracy—Lipset and Three Critical Junctures in German History
Jung, Florian & Sunde, Uwe. This paper revisits the seminal correlation first noted by SM Lipset in 1959: Almost without exception, stable democracies are economically well-developed. Why? The authors argue that democracy will stick only in fairly balanced economic environments. Distribution appears to matter for the longevity of democracy. Πηγή: CEPR πλήρες κείμενο
Houston, we have a problem: Iceland’s capital controls
Gylfason, Thorvaldur. The global crisis has brought many countries to their knees, none more so than the small island of Iceland whose losses amount to seven times its GDP. Yet while Iceland’s recovery has in many ways been remarkable, this column argues that the country’s capital controls stand in the way of further progress. Following […]
Severance Pay Programs around the World: History, Rationale, Status, and Reforms
Holzmann, Robert, Pouget,Yann, Vodopivec, Milan & Weber, Michael. The paper examines severance pay programs around the world by providing the first ever overview of existing programs, examining their historic development, assessing their economic rationale and describing current reform attempts. While a significant part of the paper is devoted to a comprehensive 183 cross country review of existing […]
The finance-trade-growth nexus and lessons from the past
Bordo, Michael & Rousseau, Peter. How interconnected are finance, trade, and economic growth? This column looks to the past in search of an answer. Examining economies that traded across the Atlantic, it finds that finance and trade reinforced one another between 1880 and 1914 but these links were absent in the post-war period. Financial development has been […]