A new economy – where are we?

Dear friends and colleagues,

Four years ago, when we held our first workshop in Edinburgh, Donald Trump was president of the United States, the United Kingdom was heading towards Brexit, and there were other rampant signs of a chaotic end to the liberal market era. Now Joe Biden is in power in the U.S., almost all international organizations are set on an orderly new course, and there are rumors of new beginnings in Germany, too – the keyword being “traffic light”.

Where are we standing in the fall of 2021? What is really new? At our ninth New Paradigm Workshop tomorrow, Wednesday, we will update you. At 11:15 a.m., Michael Jacobs and Diane Coyle will present proposals on potential common denominators for a new economic paradigm succeeding market liberalism  – for all those who no longer want the old one, and yet come from different directions. Plus: what is needed from a new generation of economists. Discussants include the chief economist of the German Federal Ministry of Finance, Jakob von Weizsäcker,as well as Maja Göpel, Antonella Stirati and the former head of the HWWI, Henning Vöpel. Wisely moderated by Jens Südekum.

With the director of the Aspen Institute, Stormy Mildner, we will talk about the attempt to develop a Cornwall Consensus after the Washington Consensus – as conceptualized and submitted by the German envoy and her colleagues, including Mariana Mazzucato and Thomas Philippon, on behalf of the G7 this summer. 10:30 a.m.

In between, there will be individual updates on how the new answers to each of the great challenges of our time are faring – with Rainer Kattel on the new role of the state, for example; with Tom Krebs on a new climate policy beyond the belief in the sole healing power of high CO2 prices; with Charlotte Bartels on the recipes against inequality; with Robert Gold on means against populism; and with Moritz Schularick on the influence of monetary policy on inequality.

Every great paradigm also needs a great guiding principle. A year ago, we showed that typical market buzzwords for the old market-liberal dogma are already in retreat. What was new in the election programs for the Bundestag this year – and how popular old and new narratives are – we tested in a Civey survey. The results will be available tomorrow at 3:15 p.m. exclusively as a Forum world premiere. Beforehand, Bochum-based economist Michael Roos will introduce us to the world of economic narratives – and the difficulty of modeling and measuring them. There will be inputs from Anatole Kaletsky as well as from William Lamb of MCC (on climate narratives).

That Americans as well as Britons are already thinking much more intensively about a new paradigm becomes palpable when one reads with how much verve the current head of the London School of Economics and former central banker, Minouche Shafik, advocates for a new social contract. She will discuss what she means by this tomorrow at 5:30 p.m. with Marcel Fratzscher of DIW Berlin and Xavier Ragot from OFCE Paris. The question that remains (for now) is whether Biden stands for a new economy, Bidenomics. Critical input on this tomorrow from Berkeley economist Barry Eichengreen – starting at 6:30 p.m. Discussants: Michael Burda and Sebastian Dullien.

It’s all about joining in.

See you tomorrow,

Thomas Fricke