From Washington to Cornwall Consensus? +++ New-Economy-Ticker +++

In a recent article for Project Syndicate, Mariana Mazzucato argues that the world is on the cusp of a long overdue paradigm shift. A profound economic shift is also called for by the  G7 Panel on Economic Resilience in their latest report.



The voices calling for a new economic consensus are gaining ground. In a recent article for Project Syndicate, Mariana Mazzucato argues that the world is indeed on the cusp of a long-overdue paradigm shift. She advocates for revitalizing the state´s economic role since global goals such as a decarbonized economy and worldwide vaccine distribution can only be achieved by increasing public expenditure.

According to the Italian economist, the Covid-19 crisis has demonstrated that the economic paradigm that advocated for free-market policies during the last mid-century – the Washington Consensus with its mantra of deregulation, privatization, and trade liberalization – has set the international community up for failure. Mazzucato argues that we are entering an era in which the irreversible damage caused climate change will determine nothing less than the survival of the human species. Therefore, policy makers must prepare to turn the tide. Ahead of the upcoming G20 Leaders Summit on October 30-31, she urges policy makers to consider a set of policy recommendations comprised under the umbrella term “Cornwall Consensus”. The term was coined by the G7 Panel on Economic Resilience, in which Mazzucato represents Italy, ahead of the G7 meeting this June. The recent report by this advisory group proposes a new international social contract. Among the concrete policy proposals are a reform of intellectual-property rights, an increase of state investment to 2% of GDP per year, and a new research institute aimed at developing solutions in the field of climate technology modelled after the European Organization for Nuclear Research (CERN). By adopting a new kind of economic agenda, to be implemented through mission-driven institutions and policies, world leaders can prevent repeating the mistakes of the past.


When the Nobel Prize reflects the paradigm shift: David Card’s experiments in the early 1990s challenged the market-liberal consensus that minimum wages always have a negative effect – a finding that has contributed to floors existing almost everywhere today.

This year’s Alfred Nobel Memorial Prize was awarded to three U.S. economists whose research has been instrumental in advancing “natural experiments.” The prize thus goes to a trio whose work on real experiments has challenged common economic beliefs.

The Nobel Prize in Economics is the only one that does not go back to Alfred Nobel. It is endowed by the Swedish Riksbank. The awards committee justified its decision by saying that the three scientists “revolutionized empirical research” by using natural experiments – real-life situations in which random events or political decisions create conditions similar to those in a clinical trial.

Laureate David Card and the late Alan Krueger, who died in 2019, proved that raising minimum wages does not necessarily lead to a decline in employment by comparing two groups of workers in the low-wage fast-food restaurant industry. A finding of revolutionary character, it broke with the hitherto prevailing consensus that higher minimum wages lead to more unemployment. Card also shattered another consensus among economists a few years later with a similar study in which he showed that immigration need not lead to wage losses for native-born workers.

Joshua Angrist and Guido Imbens receive the prize for their methodological contributions to the question of what conclusions about causality can be drawn from natural experiments. Methodologically, they have advanced economics on the question of correlation and causality. This year’s award is a tribute to those scholars whose research represents a departure from long-established, previously believed economic doctrines.

A detailed analysis of this year’s award can be found in this Handelsblatt article.

Also worth reading on the topic is this article from the Financial Times.


Change is needed in the next generation of economists: In a recent FT article, Diane Coyle argues that two crucial shortcomings prevent economics from meeting the biggest societal challenges of our time.

In a recent comment published in the Financial Times, Cambridge professor Diane Coyle calls for a change in economics – and across the next generation of economists. Coyle reasons that economics is a profession that with its influential voice in debates about society and politics comes with a special responsibility. In shaping policy and providing advice to governments and businesses, economic research and ideas hold power over the kind of society in place. Currently, says Coyle, the profession is failing to use its power so that the needs of our time can be met, and the most pressing challenges can be addressed.

For this, she blames two prominent shortcomings. One is the absence of ethics. According to Coyle, through the urge to be as objective as possible by basing economic analysis on data and rigorous statistical techniques, the illusion is being created that economists can stand apart from the society they are analysing – and delegate value judgements to those they are advising. Behind all economic analysis, says Coyle, lies an implicit moral framework. Yet welfare economics, the branch concerned with moral questions, is underrepresented in research and teaching.

The second shortcoming, according to Coyle, is the failure of economists to update their assumptions and models in accordance with the economy of today. The examples Coyle uses to underpin this point are digital technology and its invisibility in economic statistics, and the notion that people are individual maximisers, which cannot hold true in the age of social media driven by advertising revenues. Wherever change in perspectives and approaches is happening, it is not mainstream and far from textbooks, writes Coyle.

According to Coyle, it is hence left to the next generation of economists to ensure that change happens, so that economics can continue to deserve its influence – and the big challenges of our time can be met.

You can read the full article here.


The varieties of inequality: In a recent article in the Makronom, Till van Treeck explains how different forms of inequality are related to different growth models.

Together with Jan Behringer, Till van Treeck has compared inequality in liberal economies with a leaner welfare state and a pronounced shareholder value orientation (e.g. USA, UK) and in coordinated economies with stronger social protection (e.g. Germany, Scandinavia) in a forthcoming publication. The authors identified different trends. In both types of capitalism, economic inequality as measured by the Gini coefficient has risen sharply since the 1980s. However, despite the traditionally stronger social partnership between business associations and trade unions, the wage share in coordinated market economies fell more markedly than in liberal market economies. On the one hand, this can be attributed to the veritable explosion of top incomes in liberal market economies and the stagnation of the more “export-driven” economies. On the other hand, large parts of corporate profits have been retained in coordinated market economies, according to van Treeck. In liberal economies, the rapid increase in executive salaries has induced higher – often debt-financed – spending among lower- and middle-income groups to maintain relative living standards, which is why the growth model of these countries can be described as “debt-driven”. Till van Treeck argues for looking at other indicators besides the Gini coefficient when it comes to inequality and highlights the divergence between household income and corporate profits in Germany over the last twenty years.

Read the full article here.


The myth of green capitalism: In a recent Project Syndicate commentary, Katharina Pistor argues that the private sector’s embrace of green capitalism is a gimmick to avoid taking real responsibility for climate-hostile actions.

According to renowned Columbia professor Katharina Pistor, ‘green’ hedging strategies and carbon offsetting schemes allow corporations to avoid taking ownership for the losses that brown capitalism has imposed on the planet and millions of people. In her recently published commentary for Project Syndicate, Pistor argues that the capitalist system, and the laws it is build around, allow for the privatization of gains and the socialization of losses, to the benefit of big corporate entities.

Rather than markets, Pistor writes, it is the law that allows trusts and corporate entities to off-load environmental liabilities and protect their capital even as they act in an environmentally hostile manner. The new consensus with a focus on financial disclosure promises market-friendly change without having to deliver it. If greening the economy was really the goal, Pistor argues, governments would have to eliminate all subsidies for brown capitalism and  place a moratorium on shielding polluters and investors from having to take responsibility for environmental damages.

You can read the full article here.


Europe should not return to pre-pandemic fiscal rules: In a recent FT commentary, Nobel laureate Joe Stiglitz argues that a new round of austerity would be disastrous for Europe.

Columbia professor and Nobel laureate Joe Stiglitz has urged European leaders to abstain from returning to the strict fiscal rules governing deficits and spending that were eased during the Corona virus pandemic. In a recent Financial Times commentary, Stiglitz argues that breaking away from the old fiscal rules can be done sustainably through an ambitious increase of the level of investments. The pandemic had proved that rather than adhering to strict and arbitrary ratios, societies would have been better equipped to deal with the crisis if they had invested in health and supply chains.

Joe Stiglitz warns that a return to the old rules would harm social cohesion. Rather, the system should be rebalanced towards the young and low-wage earners through sustained investment. Ultimately, he says, what is needed is a “more flexible and more thoughtful approach to macroeconomic and fiscal management”.

Read the whole article here.


Values – Building a Better World for All – In his new book, former governor of the Bank of England Mark Carney argues that market fundamentalism has led to a deterioration of society’s core values. The book is subject of an upcoming OECD NAEC conference.

In his new book Value(s), former governor of the Bank of England, and now UN special envoy on climate action and finance Mark Carney examines the short-comings and challenges of what he identifies as an unreflective belief in the power and competence of free markets. This, he claims, has led to the increasing decay and undervaluation of public goods and society’s core values over past decades – and ultimately fueled the three most significant crises of the present century – the global financial crisis, the climate crisis, and the Covid crisis.  All three, he claims, have either been caused or exacerbated by a failure of markets – and those who unquailingly believe in them – to properly value the importance of ensuring our collective future well-being.

The book’s core subject—the tension between market-determined value and human-led social values—lays the foundation for what Carney sees as the solution to the current misbalances: ‘mission-oriented capitalism’. Rather than subscribing to an economy in which “the price of everything is becoming the value of everything“, markets and corporations should prioritize solving society’s problems, improving people’s lives and expanding our horizons. A better, a new kind of economics, he concludes, needs to recognize the importance of values and beliefs and nurture them into the “three key components of any good society: fairness between the generations, in the distribution of income and of life chances.“

The book, its ideas and content will be discussed at an upcoming OECD NAEC conference.

Online Conference: Value(s): Building A Better World For All
When? Wednesday, 01. September 2021: 2:00-3:00 p.m.
Where? OECD Conference Center Paris and via livestream: here  


Essay Prize “Democracy and Economy” from Hertie Foundation and WirtschaftsWoche. Interested thinkers are invited to take a fresh look at the interplay between democracy and business, politics and economics. Submissions will be accepted until Tuesday, August 10, 2021. 

Together with Wirtschaftswoche, the Hertie Foundation invites interested thinkers from the media, universities, think tanks, trade unions, companies and foundations to apply for the essay prize “Democracy and Economy”. The Corona Pandemic is increasingly turning into a stress test for the complicated relationship between democracy and economics. This warrants the question, how much democracy capitalism needs – and how much capitalism needs democracy. Submissions should take a fresh look at the interplay between democracy and the economy, between politics and economics. The deadline for submissions is August 10, 2021.

The essay prize will be awarded for both previously published and unpublished work. Published work will be awarded up to €3,000 in prize money, while unpublished work will be awarded €7,000 (first place), €3,000 (second place) and €2,000 (third place).

The winning texts will be published in WirtschaftsWoche.

All further information and the application form can be found here.


The July edition of Wirtschaftsdienst features five selected contributions from our VIII New Paradigm May Workshop. The articles cover a number of issues around fiscal policy, populism, inequality and distribution, climate, and more.

As it has traditionally occurred following our previous Workshops, this time too, a number of contributions selected from our VIII New Paradigm Workshop – “Future of the German model II: Perspectives for the next government” – have been summarised and appear on the new release of Zeitgespräch Wirtschaftsdienst < 101. Jahrgang · Juli 2021 · Heft 7 – Wirtschaftsdienst >.

The selected contributions are available for download in the links below:

Die Definition einer zukunftsfähigen Finanzpolitik

Max Krahé, Insitut für Sozioökonomie der Universität Duisburg-Essen; Denkwerkstatt „Dezernat Zukunft“

Philippa Sigl-Glöckner, Denkwerkstatt „Dezernat Zukunft“

Wie kann Wirtschaftspolitik zur Eindämmung des Populismus beitragen?

Robert Gold, Institut für Weltwirtschaft in Kiel

Krise und Reformbedarf der BaFin

Martin Hellwig, Max-Planck-Institut zur Erforschung von Gemeinschaftsgütern in Bonn

Gerhard Schick, Verein Bürgerbewegung Finanzwende

Ungleichheit der Haushaltsnettoeinkommen – Trends, Treiber, Politikmaßnahmen

Markus M. Grabka, DIW Berlin/SOEP

Klimaschutz und der moderne Staat

Tom Krebs, Universität Mannheim


The return of hyperinflation? In May, the inflation rate in Germany reached 2.5 percent, the highest level in almost ten years. In an interview, economic historian Carl-Ludwig Holtfrerich explains why there is nevertheless no threat of hyperinflation.

There is (once again) a lot of talk about inflation. The reference point is one of the Germans’ favorite specters of terror: the hyperinflation. In an interview, Carl-Ludwig Holtfrerich explains how the fear of inflation was already politically instrumentalized by Reich Chancellor Brüning to enforce a harsh austerity course. Moreover, he says, the historical memory of the two crises of the Weimar Republic is clouded by mixing hyperinflation and the Great Depression.

Instead of inflation, the economic historian is more concerned about the Germany’s attitude towards public debt. Under the reference to a solid budget, there is not enough money for urgently needed public investments. This is counterproductive for wealth creation, especially in a world with declining private investment and a simultaneous increase in global savings. According to Holtfrerich, this development is also the reason for the historically low interest rate environment – and not the ECB’s zero interest rate policy.

You can read the full interview here.


If there is one thing that the German economic model stands for, it is Soziale Marktwirtschaft. But what does this term stand for today? A new documentary revolves around this question.

The social market economy (Soziale Marktwirtschaft) has been the consensus concept of German economic policy for decades. Hardly any party or interest group can do without paying homage. But apparently the population sees it differently: according to various surveys, a majority of Germans have for some time been of the opinion that they do not benefit from the current economic system and that the current economic system needs a (fundamental) improvement .

The documentary Germanomics is about the search for the why. Through conversations with 19 scientists, the documentary captures the concept of the social market economy in concrete indicators and highlights the economic policy status quo in Germany in the super election year 2021. The film is also based on some projects of the Forum. Among them a study on inequality by Charlotte Bartels and Carsten Schröder (DIW) or an interview with Robert Gold on the economic roots of populism .


Forum in the Media – The debate surrounding the upcoming Bundestag election is failing to address the important issues of the future. The contributions at the VIII New Paradigm Workshop highlight the questions we rather should be asking, says Der Spiegel.

The Bundestag election campaign should be about more than short-haul flights and Christmas money, argues Thomas Fricke in Der Spiegel. Populism, climate change and the increasing gaps between winners and losers of globalization – the coming government must face up to big questions. The contributions at the eighth New Paradigm Workshop of the Forum New Economy last week give an impression of the really important matters of the future, so the tenor of the column.

First and foremost, this includes asking the question of how to effectively reduce the widening gap between rich and poor in Germany, or how to curb the loss of control felt by many people, which, according to populism researcher Robert Gold, is noticeably helping to fuel populist movements. How to truly combat the climate crisis is another question looming large. Tom Krebs of the University of Mannheim estimates that the German government would have to invest 100 billion euros over the next 10 years to enable an industry conversion to green hydrogen. And how is this supposed to be financed if the sensibility of the debt brake remains unquestioned? Joe Biden in the USA is currently demonstrating what a politics of tomorrow may look like. Can and should we achieve something similar here? All of this and more was discussed during the Forum New Economy conference – showing what should actually dominate the election debate.

You can read the full column here.

An overview of the contributions to the VIII New Paradigm Workshop can be found here.


Germany needs more investment, writes the SZ. The article references studies commissioned for the Forum, all of which call for a more active role of the state – and higher government spending.

“The country needs investment,” is the key message of Cerstin Gammelin and Alexander Hagelüken in their article for the Süddeutsche Zeitung, where they present key studies undertaken for the occasion of the Forum’s recent VIII New Paradigm Workshop. As figures from the Macroeconomic Policy Institute (IMK) suggest, the German government would have to invest around one percent of gross domestic product, or about 460 billion euros, to make up for past shortcomings and achieve a sustainable level of investment. A massive sum – how can this possibly be financed? According to Philippa Sigl-Glöckner of ‘Dezernat Zukunft’, a reform of government spending policy is urgently needed – moving away from a minimal debt ratio towards a state policy that strives for lower unemployment rates, better wages and a reduction in involuntary part-time work.

Also at the center of the debate: calls for increased spending on climate-friendly technologies such as renewable energy based hydrogen. According to a recent study by Tom Krebs of the University of Mannheim, instead of its currently planned 12 billion euros, the German government would have to invest up to 100 billion euros in a hydrogen climate strategy.

Not only in terms of future investments, but also in present terms, the government is challenged to act: Stefan Bach and Markus Grabka of the German Institute for Economic Research (DIW) argue for an expansion of collective wage agreements and a tax reform to specifically promote the incomes of those who have little. In particular, they say, the proportion of people in Germany who own their own home is far too low by European standards and needs to be elevated.

All studies cited in the article were undertaken on behalf of the Forum New Economy for its eighth New Paradigm Workshop on the Future of the German Model, taking place May 25-27.

The full article can be found here.


Nobel laureates and former heads of state and government co-sign a call for encouraging Biden to support a waiver of Covid-19 related patents.

Joe Stiglitz, Gordon Brown, and many others join forces and urge US president Joe Biden to consider a temporary waiver of WTO´s intellectual property rules during the Covid-19 pandemic. The hope brought up by vaccine rollouts in wealthier countries is far from reaching low- and middle-income countries. Vaccine access in those countries urgently needs to be scaled up if the ultimate goal is that of saving as many lives as possible and reaching global herd immunity – an open sharing of know-how and technology is thus a moral imperative.

This the core message of the open call published on Project Syndicate and signed by many Nobel laureates and former heads of state and government: “If the past year has taught us anything, it is that threats to public health are global, and that strategic government investment, action, cooperation, and solidarity are vital. The market cannot adequately meet these challenges, and neither can narrow nationalism.”

You can read the full article here.


Online conference: A systemic Recovery
When? Wednesday, 28 April, 2021: 3:00 pm – 6:00 pm
Where? Online conference: Join the livestream via this link.

The first session (15:00) features a High-level Panel discussion, chaired by Rana Foroohar and Martin Sandbu of The Financial Times, on avoiding post-COVID stagnation, negative spill-overs on emerging and developing economies, and how to transform our economic and financial system to achieve environmental and social goals. The speakers include UN Special Envoy on Climate Action and Finance, Mark Carney; IMF Chief Economist, Gita Gopinath ; UCL Professor, Mariana Mazzucato; Harvard economist, Kenneth Rogoff; and Nobel Prize-winning economist, Paul Krugman.

The full agenda is available here.

The French weekly magazine L’Obs promotes Joe Biden as the new Roosevelt and analyses the new spending plans and tax rules proposed by the US president in light of the radical shift they represent from the prevailing ideology of the last four decades.

Is Joe Biden to F. D. Roosevelt what his new spending and fiscal plans are to the New Deal? This image is crystallising more and more. In our recent series of articles analysing the ´rescue plan` first and the ´infrastructure plan` then, we already hinted that Joe Biden’s proposals were close to ending the era of neoliberal policies so cherished by Reagan and his successors, and that – as discussed in our December Short Cut with James Galbraith – with Joe Biden in power the possibility of a new New Deal was approaching.

Now even the influential French weekly magazine L’Obs promotes Joe Biden as the new Roosevelt and devotes 10 very interesting pages to him, where it also addresses the question of whether the EU is prepared to embrace this paradigm shift in terms of public spending and fiscal rules coming from overseas.


While 30 years ago both the IMF and the World Bank were prominent advocates of free-market economic policies and fiscal discipline, today the agenda of these institutions seems to have changed drastically. Martin Sandbu describes this transition as a „conversion that could put Saul of Tarsus to shame“.

Not only are the multilateral institutions‘ economists relaxed about the massive deficit spending by rich countries connected to rescue packages due to the pandemic, but they are also in favour of spending on education or redistributive measures. The International Monetary Fund, for instance, has proposed a ‘solidarity’ tax on high earners and very profitable companies in order to pay up to bolster social cohesion in light of the pandemic.

Quoting Martin: „New Consensus: Spend big on public health. Fiscal probity, long the core of IMF prescriptions (the joke was that the initials stand for “it’s mostly fiscal”), is no longer about reining in public spending but about getting value for money — and spending more where the value can be found.“

The full article can be found here.

Hewlett Foundation expands support to develop a new intellectual paradigm to replace neoliberalism

The new Economy and Society Initiative (EIS) will help develop a new “common sense” about how the relationship between governments, markets, and people should be structured to meet society’s biggest challenges.

After a two-year, $10 million exploratory grantmaking effort to examine potential successors to neoliberalism, the Hewlett Foundation’s board approved a further five-year, $50 million initiative to continue the development of a new paradigm.

Read more about the five year initiative – here.  The entire grant making strategy of the EIS is available – here.


Nobel Laureate Economists Call for Vaccine Equity, Pandemic Debt Relief for Global South – A report from INET´s Commission on Global Economic Transformation 

Report release on Thursday, March 11 at 8:00 AM EST (13:00 GMT) 

In the report, INET´s Commission on Global Economic Transformation calls on developed countries to ensure vaccine equity, debt relief, and fiscal capacity for the Global South in response to the COVID-19 pandemic and economic crisis. Register here for the press conference featuring Joseph Stiglitz (co-chairing the CGET), INET President Rob Johnson, and Commissioners Jayati Ghosh, Rohinton P. Medhora, and Michael Spence.


“The $1.9 trillion stimulus should be large because the need is large” – Claudia Sahm´s call for the Congress not to listen to “inflation hawks” and to go big with its stimulus package in her latest contribution for INET

In a recent contribution for INET, Claudia Sahm says that the Congress should refrain from following the unfunded fears of  “inflation hawks” as that would result in doing too little – and the disastrous consequences of a timid policy response, such as that of the Great Recession are all too vivid and provide a valid ground for not running that risk anymore. The risks that an insufficient relief package could leave millions of American families unattended, increase inequality, and needlessly prolong the recovery are too high and, conversely the prospects of  overheating the economy are too little to justify the risk of letting a big chunk of the population suffer the consequences of the pandemic driven crisis.

Check out the essay where the author goes through the main points informing the debate around the topic and proves the Congress has indeed solid grounds for going big.



Thursday 25 February, 3:00 p.m.- 4:00 p.m.

Stephanie Kelton

Stephanie Kelton is a professor of economics and public policy at Stony Brook University and a Senior Fellow at the Schwartz Center for Economic Policy Analysis.  She is a leading expert on Modern Monetary Theory and a former Chief Economist on the U.S. Senate Budget Committee.


Vice-president Dick Cheney famously boasted, “Reagan proved deficits don’t matter.” Was he right? Do deficits matter? Stephanie Kelton leads a debate on whether deficits matter and how we think about government spending today and the implications for future generations. Can deficits be used to sustain life and build a more just economy that works for the many and not just the few?

Watch the webcast

Join by zoom

Topic: NAEC seminar with Stephanie Kelton

Time: 25 Feb, 2020 15:00 Paris

Join Zoom With a Computer (Zoom Client)

Or with Chrome

Join Zoom with a tablet or smartphone (download Zoom app IOS or Android – Wifi and 3G/4G)

Meeting ID: 990 0358 6761

Password: VUTh5&Lh2d

Or with chrome


Yuval Noah Harari & Rutger Bregman discuss the need for a new paradigm

The conversation on global challenges and their implications was moderated by Zanny Minton Beddoes, editor-in-chief of The Economist.


As Communication and Research Associate your role will be to support the Forum in coordinating its external communication and media activities, as well as in contributing to content work and organizational tasks, reporting to the Forum’s Director. Find a detailed jobn description — here.

Location: Berlin

Start date: As soon as possible

How to apply: Please upload your CV and a short cover letter here:


Süddeutsche Zeitung cites loneliness study by Julia Becker (University of Osnabrück): Loneliness and well-being dependent on social system.

What happens to people when the economy and society are organized according to free market principles and state intervention in the economy is minimized? Prof. Dr. Julia Becker from the University of Osnabrück in cooperation with the University of Queensland, (Australia) investigates this question in a new study entitled “Neoliberalism can reduce well-being by promoting a sense of social disconnection, competition and loneliness”. The study was quoted in the Süddeutsche Zeitung (3.2.2021), among others. The authors ask to what extent neoliberalism influences the individual sense of loneliness. Neoliberalism is the idea that progress is best achieved through individual responsibilities and freedom from competition.

The conclusion of the studies is that loneliness and mental health do not occur in a vacuum, but are dependent on the social climate. The neoliberal idea of free competition and individual accountability can lead people to see themselves more in competition with others, feeling less supported by their social groups and networks, which in turn leads to increased loneliness and poorer mental health.

Becker, J.C., Hartwich, L., & Haslam, S.A. (in press). Neoliberalism can reduce well-being by promoting a sense of social disconnection, competition and loneliness. British Journal of Social Psychology.


John Cassidy: GameStop-Stock boom shows how U.S. markets are currently in the grip of the “the madness of crowds.”

The surge of speculative investing in GameStop stock is just one example of how the U.S. markets are currently in the grip of the ‘the madness of crowds’“, writes journalist John Cassidy in the New Yorker, reminding us of how outdated the old paradigm of believing in the hyper-efficiency of financial markets actually is. Instead, we should take a deeper look at the theories of Hyman Minsky and Charles Kindleberger to understand and eventually tame such phenomena as the current exuberant stock market boom. Cassidy, in fact, suggests that the Federal Reserve System should act, for example, by imposing margin requirements on equity traders.



Transformative Responses to the Crisis – Next Generation Central Banking

In March 2020, central banks have once again proven to be the first line of defense in crisis-ridden times. With their far reaching actions they prevented the world from experiencing a collapse of financial markets on top of the severe health and economic crisis caused by Covid-19. Since the global financial crisis, central banks’ roles and repertoire have vastly changed.

The Federal Reserve has recently adopted a new strategy of average inflation targeting for its monetary policy and the European Central Bank is currently conducting the first strategy review in 17 years – President Lagarde has made it very clear that the ECB intends to address this new role.

“Transformative Responses to the Crisis” believes that this calls for a wider debate on the role of central banks in times of financial instability, growing inequality and an escalating climate crisis. Central banks have powerful tools at their disposal. Should they – and if so, how – support policy goals beyond their traditional price stability mandate? The conference “Next Generation Central Banking: Climate change, inequality, financial instability” on 3-5. February 2021 will provide a forum on these timely questions.

For Registration and the agenda to the event, click here!

Katharina Pistor – The Code of Capital


Shortly after the financial crisis of 2008, it suddenly seemed possible to change fundamental aspects of capitalism. The positions of Thomas Piketty and “Occupy Wall Street” seemed capable of gaining majority support, but in the end the system was only stabilised by a few adjusting screws. Pistor explains the developmental tendency of growing inequality, which was statistically proven to capitalism by Piketty, through the history of its legal constitution. In this way, she also opens up a clarifying view of notorious business practices and corporate structures that have become notorious in the course of the financial crisis. In the SZ, Katharina Pistor from Columbia Law School gives an insight into her work “The Code of Capital”, which is now also available in German.


Open Position at Laudes Foundation

The Laudes Foundation is looking for a Programme Manager for the Financial and Capital Market transformation. The person would be mainly responsible for identifying, supporting and scaling capital market interventions – particularly those related to the New Economic Thinking work stream – that improve global equality and address the threat of climate change, whilst incorporating the Foundation’s definition of value and working towards the Paris Compliance.

You can apply here.

27th Nov 2020

How hard has the Corona crisis hit the economy and with what degree of confidence can one look into the future. In the context of the new OECD Economic Outlook, Philipp Steinberg, BMWi, Otto Fricke, MdB (FDP), Cancel Kiziltepe, MdB (SPD), Lisa Paus, MdB (BÜNDNIS 90/DIE GRÜNEN) and Joachim Pfeiffer, MdB (CDU) will discuss this issue. The discussion will begin after a keynote speech by OECD Berlin Director Nicola Brandt and will be led by Thomas Fricke. For registration please click here.

Quick & New – INET Debt Talks – Do We Need a Debt Jubilee?

25th Nov 2020

Should we cancel some of our debt? The private or the public debt?These and many other question will be discussed in the fourth edition of the INET Debt Talks with Moritz Schularick. This time including the following experts: Sebnem Kalemli-Ozcan (Senior Policy Advisor, International Monetary Fund), Astra Taylor (Documentary Filmaker, and Author) und Richard Vague (Acting Secretary of Banking and Securities, Commonwealth of Pennsylvania; Chair, The Governor’s Woods Foundation).

Tune in on 25th Nov at 6 p.m. CET:

Quick & New: Wolfgang Schäuble sees uncontrolled capitalism as a threat

16. November 2020

“The virus has taught us that we need more resilience,” says the former advocate of asuterity measures in the euro crisis, calling for capitalism to be curbed.

Wolfgang Schäuble, father of the black zero, former Minister of the Interior and Finance and now President of the German Bundestag, is worried about the current economic system. In an interview with Die Welt he warns that “we have forgotten something in the globalisation frenzy”. Schäuble warns against excessive free world trade, the disproportionate power of the financial industry and questionable conditions in global supply chains. Schäuble also joins in the recurrent debate about GDP as a proper welfare indicator and calls for a more comprehensive indicator to measure prosperity. New tones from one of the key architects of austerity measures in southern European countries during the euro crisis. Schäuble also continues to believe in the meaningfulness of the black zero in terms of generational equity and, given that the CDU continues to drag the supply chain law, Schäuble’s words regarding global supply chains also seem interesting.

Read the full interview in German with Die Welt here.

Quick & New: YSI 2020 Plenary – New Economic Questions

10. November 2020

What are the 100 most pertinent economic questions facing our global society? Our partner organization, INET’s Young Scholars Initiative is hosting a virtual plenary with numerous top speakers including George Akerlof, Joseph E. Stiglitz, Adair Turner, Yanis Varoufakis and many more. You can join the virtual world — here.

Quick & New: Was the World Bank’s Doing-Business-Index manipulated?

In 2018 chief economist of the World Bank Paul Romer told the Wall Street Journal, that he has lost faith in the integrity of the Doing-Business-Index. Now the WOrld Bank has stopped the publication of its „Doing-Business“-Index (DB). Helmut Reisen argues in IPG that the German government should also develop and calibrate new indicators. Read the full article — here.

Quick & New: Fiscal standards for Europe

At yesterday’s Economic Policy Panel Meeting at Germany’s Federal Ministry of Finance Olivier Blanchard, Alvaro Leandro and Jeromin Zettelmeyer presented their new paper on “How to redesign the EU’s approach to public debt sustainability”

After almost 30 years from their conception, most economists and EU policy-makers agree that the European Union´s fiscal rules need to be reformed. Olivier Blanchard, former IMF chief economist, advocates instead for a fundamental rethinking of the premises underlying the EU´s fiscal framework. Incremental reforms – he claims – will not suffice.

In their new research report, Olivier Blanchard together with Jeromin Zettelmeyer and Alvaro Leandro put forward the idea that the European Union should abandon the fiscal rules currently regulating national budgetary policies and embrace fiscal standards which would allow more room for maneuver. The rationale behind the authors´ argument is that fiscal rules are unable to anticipate and embed the complex time- and country-specific features of public debt sustainability. Standards, unlike rules, would in fact allow for a qualitative rather than numerical assessment of national behaviours. An independent institution would then determine ex post whether said standards or qualitative prescriptions have been satisfied. This way, mistakes bound to complexity-simplifyng rules could be avoided.

The full paper can be downloaded — here.

Watch the video recording of yesterday’s panel below:

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