Redefining the role of the state
For decades, there was a consensus that reducing the role of the state and cutting public debt would generate wealth. This contributed to a chronic underinvestment in education and public infrastructure. New research focuses on establishing when and how governments need to intervene to better contribute to long-term prosperity and to stabilize rather than aggravate economic fluctuations.
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The State
In Focus: -
The disenchanted state
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How much debt is too much?
The State
New Paradigm Knowledge Base
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The Challenge
Decaying infrastructure and a lack of investment in education and innovation expose the weaknesses of an overly market-driven paradigm
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What went wrong?
Reducing the role of the state in the economy was seen as the best way to ensure high levels of growth.
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New Economy in Progress
The challenges of our time require us to rethink the role of the state and the need for a more active fiscal policy.
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CHART: The steep decline in net public investment
Total capital expenditure minus the cost of replacing worn-out depreciation of assets.
5 possible ways that are discussed to redefine the role of the state
- Boost investment in education, healthcare, infrastructure. This could more than pay for itself.
- Use fiscal policy as a tool for macroeconomic stabilization and to boost economic activity
- Use of state as an entrepreneurial actor, investing in and deploying new technologies.
- Central banks could distribute money directly to citizens in an attempt to boost consumer confidence and consumption.
- Demonstrate the indispensability of the state by tackling monopolistic capitalism.
More News on The State
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How German companies feel about key election issues – A mood survey
How do German companies view key campaign issues such as industrial and climate policy shortly before the election? Deutsche Bank surveyed 200 companies on this issue - with surprisingly heterogeneous results.
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Beyond the debt brake – Towards a more flexible German fiscal policy?
At the moment, there is much debate about the German debt brake. At the VIII. New Paradigm Workshop, Philippa Sigl-Glöckner and others discussed a proposal for a reform commissioned by the Forum New Economy.
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The Prudence Principle: A New Framework for Fiscal Policy
Mark Blyth and Eric Lonergan have presented their Forum paper on how, in principle, rules could be established that would be better than debt targets that have dominated in recent decades, especially in Europe.
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New Fiscal Rules for Europe?
Prominent French economists around President Macron are calling for a reform of the European Stability and Growth Pact, causing much excitement in Brussels and Berlin.
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World Summit for A Systemic Recovery from the Pandemic
What a selection of the world's most renowned economists recommends - short report from an impressive NAEC conference.
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Controversy over rent cap
What are the current economic debates on housing? A brief overview of the most important points of contention.
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Makronom Series on the Relationship between the Market and the State in the Post-Corona Age.
COVID19 and the climate crises, growing inequality and financial market stability: almost everywhere, the relationship between markets and governments needs to be re-examined. A review of the series in the online magazine Makronom.
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Stephan Weil on the challenges for the automotive location Lower Saxony – Video
At our recent seminar on the transformation of the German car industry, the Minister President of Lower Saxony talked about the implications of the transformation of the German car industry for the Volkswagen region and the state government's contribution.
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Olaf Scholz and the missions of the future
The German finance minister and SPD shadow chancellor presents what big missions the country needs. This sounds a lot like Mariana Mazzucato, who recently applied the concept to Germany in a study for the Forum.
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A Debt Brake for the 21st Century
In a newly published piece on Makronom, Philippa Sigl-Glöckner lays out her formula for a reform of the German debt brake.
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Mariana Mazzucato & Rainer Kattel in the FAZ: “The State must do better”
In a guest article for the Frankfurter Allgemeine Sonntagszeitung, Mariana Mazzucato and Rainer Kattel plead not for more or less state, but for a better one.
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New Economy Working Paper – Challenge-driven economic policy – A new framework for Germany
A new study by Mariana Mazzucato and her team from the Institute for Innovation and Public Purpose at University College London
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New Economy Working Paper out – A new paradigm for Germany’s fiscal policy after Corona
A new study by Michael Hüther (IW Köln) and Jens Südekum (DICE) looks into the past and the future of the German debt brake.
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Video – New Economy Short Cut on the US Election Outcome
The US-citizens voted in what is deemed to be one of the most important elections of western democracies. We discussed the (preliminary) result with Katharina Pistor and Rüdiger Bachmann at November 4 from 3pm CET onwards.
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Highlights – A Talk between Joseph E. Stiglitz and Olaf Scholz
We summarize the talk at the 7th New Paradigm Workshop between Nobel laureate Joseph Stiglitz and Federal Finance Minister Olaf Scholz from the SPD.
