The Distributional Effects of Fiscal Consolidation
Ball, Laurence, Furceri, Davide, Leigh, Daniel & Loungani, Prakash. This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The […]
Explaining the global Great Recession
Bacchetta, Philippe. How can we explain the rapid spread of the Great Recession? This column focuses on international co-movements to explain its global nature, developing a model that shows the global panic to be a rational self-fulfilling mechanism and global co-movements to occur even in countries without much economic integration. Perhaps most importantly, the global […]
A step in the dark: unconventional monetary policy after the crisis
Rajan, Raghuram. Two competing narratives of the sources of the crisis, and attendant remedies, are emerging. The first, and the better known diagnosis, is that demand has collapsed because of the high debt build up prior to the crisis. The households (and countries) that were most prone to spend cannot borrow any more. To revive […]
Migrating out of poverty: The role of finance
Ayyagari, Meghana, Beck, Thorsten & Hoseini, Mohammad. Financial liberalisation has been controversial among academics and policymakers as it is not clear whom the benefits of expanded credit allocation accrue to. Using time and state-level variation across Indian states, this column finds strong evidence that financial deepening reduces rural poverty, especially among the self-employed. Financial deepening is also […]
High home ownership as a driver of high unemployment
Oswald, Andrew. Unemployment is once again the bane of the US and Europe. This column highlights an intriguing association between home ownership and high unemployment using US state-level data. Given the heavy subsidisation of and rise in home ownership, this association merits more attention from economists. Πηγή: Voxeu πλήρες κείμενο
All Quiet on the Currency Front
Frankel, Jeffrey. The term “currency wars” is a catchy way of saying “competitive devaluation.” In the wake of the sharp fall in the value of the yen over the last six months, owing to the monetary component of Japan’s efforts to jump-start its economy, the issue is expected to feature prominently on the agenda at […]
Conflict Management and Economic Growth
Rajan, Raghuram. One of the most interesting aspects of the prolonged economic crisis in Europe, and of the even longer crisis in Japan, is the absence of serious social conflict – at least thus far. Yes, there have been strikes, marches, and growing anger at political leaders, but protests have been largely peaceful. Πηγή: Project […]
Austerity and Demoralization
Shiller, Robert. The high unemployment that we have today in Europe, the United States, and elsewhere is a tragedy, not just because of the aggregate output loss that it entails, but also because of the personal and emotional cost to the unemployed of not being a part of working society. Πηγή: Project Syndicate πλήρες κείμενο
What Use Are Economists?
Rodrik, Dani. When the stakes are high, it is no surprise that battling political opponents use whatever support they can garner from economists and other researchers. That is what happened when conservative American politicians and European Union officials latched on to the work of two Harvard professors – Carmen Reinhart and Kenneth Rogoff – to […]
Rethinking macroeconomic policy
Blanchard, Olivier. Macroeconomics was challenged by the Global Crisis. In this column, one of the world’s leading macroeconomists provides his take on the highlights of the IMF’s recent conference. He concludes by noting that the conference set a clear research agenda for the future. Πηγή: Voxeu πλήρες κείμενο