Let’s Not Be Civil
Krugman, Paul. Last week, President Obama offered a spirited defense of his party’s values — in effect, of the legacy of the New Deal and the Great Society. Immediately thereafter, as always happens when Democrats take a stand, the civility police came out in force. The president, we were told, was being too partisan; he […]
Saving the WTO from the Doha Round
Evenett, Simon. The recent bleak news on the Doha Round of trade discussions has thrown its future into doubt once again. This column discusses ways to salvage the talks and the World Trade Organisation itself, arguing that it is time to start thinking about changing the way the organisation does business in order to reflect […]
Optimal Bank Capital
Marcheggiano, Gilberto, Miles, David & Yang, Jing. This paper reports estimates of the long-run costs and benefits of banks funding more of their assets with loss-absorbing capital, or equity. Measuring those costs requires careful consideration of a wide range of issues about how shifts in funding affect required rates of return and on how costs are influenced by the […]
Rational Irrationality
Cassidy, John. Snow-capped peaks; nightcaps with Larry Summers; discussions of complexity theory over breakfast; Tennyson quotations from Gordon Brown at lunch. No it’s not Davos—it’s Bretton Woods, New Hampshire, where over the weekend the Institute for New Economic Thinking (INET), which George Soros set up in the wake of the financial crisis, held its second […]
The Danish flexicurity model in the Great Recession
Andersen,Torben, Bosch, Nicole, Deelen, Anjia & Euwals, Rob. Before the Great Recession, Denmark’s “flexicurity” model had been lauded as an example of how to achieve outstanding labour-market performance. This column takes a closer look at Denmark’s labour-market response during the recent global crisis. Although it is too early to draw ultimate conclusions, it says some challenges are already visible. […]
How Rich Countries Became Rich and Why Poor Countries Remain Poor: The Role of Sophisticated and Well-Connected Products
Felipe, Jesus, Kumar, Utsav & Abdon, Arnelyn. In a new paper, Felipe et al. (2010) provide empirical support for the idea that countries that are unable to upgrade and diversify their exports may end up being caught in a middle-income trap. They classify 779 products according to their sophistication and connectivity to other products and use this […]
Πολιτικοί και οικονομολόγοι
Εκφράζοντας, ως άνθρωπος της πράξης, το βαθύ σκεπτικισμό του για την οικονομική θεωρία, ο Denis Healy, υπουργός οικονομικών στην κυβέρνηση των βρετανών Εργατικών κατά την περίοδο 1974-1979, παραθέτει τα λόγια που, κάποια στιγμή, ο αμερικανός πρόεδρος Lyndon Johnson (1961-1963) απηύθυνε στον John Kenneth Galbraith: «Did y’ever think, Ken, that making a good speech on ee-conomics […]
The euro zone’s periphery:They’re bust. Admit it.
Greece, Ireland and Portugal should restructure their debts now. It is a measure of European politicians’ capacity for self-delusion that Angela Merkel, Germany’s chancellor, called the euro-zone summit on March 24th-25th a “big step forward” in solving the region’s debt crisis. Something between a fudge and a failure would be more accurate… Πηγή: The Economist […]
Do some countries in the Eurozone need an internal devaluation? A reassessment of what unit labour costs really mean
Felipe, Jesus & Kumar, Utsav. The problem with Greece, Ireland, Italy, Portugal, and Spain is that they are uncompetitive and need to internally devalue – or so the argument goes. This paper challenges this conclusion by pointing out that the measure used to back it up – unit labour costs – is flawed and misguided. […]
A Decade of Debt
Reinhart, Carmen M. & Rogoff, Keneth. With public debt in the US higher than it’s been since 1945 and private debt burgeoning, governments are panicking about the impact of debt overhang on growth. In CEPR DP8310, Reinhart and Rogoff argue that governments have increasingly resorted to undercover restructuring by using the tools of “financial repression” […]