PERIOD

According to the report, the current paradigm of financial policy requires an overhaul as it contributes to increasing inequality and stands in the way of equitable climate action. The authors bring forth different measures at the European level, from better financial regulation such as new liability rules for portfolio companies to curbing tax evasion by extending the scope of the global minimum tax to include investment funds. They also suggest a new European social taxonomy that could promote socially valuable investments and call for enforcing conditionality in government subsidies.

Read the full report (in English) here and a summary on Social Europe here.

Why Have Inflation Forecasts Been So Wrong? – Article (Paywall)
Willem H. Buiter & Ebrahim Rahbari, Project Syndicate, 01.04.2024

To explain why forecasters at the US Federal Reserve and other major institutions missed the mark on inflation in recent years, it is tempting to conclude that they were blindsided by unpredictably large shocks. But if the prevailing models work only when variables are relatively stable, they are of little use.

Three economic zombies worth fighting – Column (Paywall)
Martin Sandbu, Financial Times, 04.04.2024

Bad policy ideas that are surprisingly widely held.

Why the German economy is deep in crisis (Paywall, German)
Martin Greive, Handelsblatt, 04.04.2024

 High energy prices are often blamed for the economic weakness, according to the German government. A new IMF analysis shows: This narrative is not true. The country has deeper problems.

Do politicians not know how to handle money? – Column (Paywall, German)
Mark Schieritz, Die Zeit, 03.04.2024

The state should not accumulate too much debt, which is why there is a brake in the Basic Law. As if the political class would otherwise throw money around without restraint.

“Life and death are more important than money” – Interview with Angus Deaton (Paywall)
Mark Schieritz, Die Zeit, 27.03.2024

Do we benefit from immigration? Does trade create prosperity? Are Americans really better off than Germans? Nobel Prize winner Angus Deaton believes so: Economists are wrong in their answers to these questions.

Poor Nations Are Writing a New Handbook for Getting Rich – Article (Paywall)
Patricia Cohen, The New York Times, 02.04.2024

Economies focused on exports have lifted millions out of poverty, but epochal changes in trade, supply chains and technology are making it a lot harder.

Who’s Afraid of Price Controls?
Tom Krebs & Isabella Weber, Project Syndicate, 26.03.2024
Although price controls have been widely implemented since Russia’s invasion of Ukraine, mainstream economists remain apprehensive about them. Building up buffer stocks of essential commodities is preferable to relying solely on stopgap measures, but buying time is better than allowing supply shocks to wreak havoc on our economies.

Economic institutes in favour of „a cautious reform of the debt brake“ (Paywall)
Martin Greive, Handelsblatt, 27.03.2024
To get out of the crisis more quickly, Germany should raise the debt ceiling, the economic researchers advise. In extreme cases, this could almost triple the room for maneuver.

Nine figures give Germany´s economy new hope
Julian Olk, Handelsblatt, 25.03.2024
This year will be miserable for the economy for the time being. This is shown by the new forecast of the leading institutes, the results of which are exclusively available to Handelsblatt. However, there are a number of signs that the recovery will soon begin.

We must arm ourselves for prosperity 
Moritz Schularick, Spiegel, 27.03.2024
Germany is currently unable to defend itself and the economy is paralyzed. The state should make a virtue of this need and boost growth by spending on defense.

Europe’s High Noon
Harold James, Project Syndicate, 26.03.2024
With Ukraine depleted and overstretched, and with Russia posing a security threat to the Baltics and Europe more broadly, diplomatic and strategic coordination is more necessary than it has been since the end of the Cold War. Yet political leaders in Europe and the United States look too weak to rise to the occasion.

The woman behind Habeck 
Gerald Traufetter, Spiegel, 27.03.2024
State Secretary Franziska Brantner is traveling the world on behalf of the Federal Minister of Economics to secure raw materials for German companies. Her aim is to reduce industry’s dependence on China. And encounters unexpected resistance.

The world is warming faster than scientists expected
FT Editorial Board, Financial Times, 24.03.2024
To an extent not widely appreciated, the world is now warming at a pace that scientists did not expect and, alarmingly, do not fully understand. Fossil fuel groups and investors cannot afford to ignore the warnings.

Fascism has changed, but it is not dead 
Martin Wolf, Financial Times, 26.03.2024
The 1920s and 1930s were different times but a core of traditional attitudes persists. What we are now seeing is not just authoritarianism. It is authoritarianism with fascistic characteristics. 

The Middle-Out Moment Is Here
Democracy Journal, Spring 2024, No. 72.
(A Symposium featuring articles by Nick Hanauer, David Goldstein, Felicia Wong, Todd Tucker, Heidi Shierholz, Jennifer Harris and many more.)
Eleven years ago, this journal published a symposium called “The Middle-Out Moment,” touting a new theory of growth no one had heard of. Today, everyone has heard of middle-out economics, but most people still don’t know exactly what it is. With this issue, we revisit the topic: naming its core tenets, touting its successes, acknowledging its hurdles and complexities—but still arguing forthrightly that this is the economic future the country needs.

These are the millions of people who vote AfD (German / Paywall)

Christian Endt, Sasan Abdi-Herrle, Jakob Bauer, Paul Blickle, David Schach und Julian Stahnke, Zeit Online, 21.03.2024

Male, East German, od? Nothing like that. Our data analysis provides new insights into who AfD supporters really are. And what makes them drift to the right.

 

A new class conflict has emerged – Interview with Thomas Piketty (German /Paywall)

Marcus Gatzke & Mark Schieritz, Die Zeit, 16.03.2024

Die Provinz wählt rechts, die Metropole links: Der berühmte französische Ökonom Thomas Piketty warnt vor einer Spaltung der Gesellschaft.

 

America (still) has no industrial policy (Paywall)

Rana Foroohar, Financial Times, 18.03.2024

The Biden administration has reasserted the role of the state in the US economy in ways we haven’t seen for half a century: supporting re-industrialisation, subsidizing strategic industries, boosting unions, rethinking trade relations and rebooting competition policy. Yet those are separate policies, not a fundamentally new operating system.

 

Reset finance: a new financial agenda for the EU

Aurora Li, Michael Peters & Uwe Zöllner, Social Europe, 20.03.2024

The financing of a just green transition requires both private and public capital—on that there is consensus. There is, however, less agreement on the regulatory framework. The next commission, emerging after the June elections to the European Parliament, needs to reset the rules for private investment to guarantee the social-ecological transition.

 

How Capitalism Became a Threat to Democracy

Mordecai Kurz, Project Syndicate, 15.03.2024

Since the 1980s, American capitalism has been transformed into a winner-takes-all economy in which one or a few technologically dominant firms monopolize each sector at the expense of consumers, workers, and overall growth. And with permanent market power comes the kind of political power that is antithetical to democracy.

 

Who is afraid of price controls? (German)

Tom Krebs & Isabella Weber, Makronom, 18.03.2024 

A new paper shows that economists’ fear of price controls led to a delayed and sub-optimal response to the energy crisis – with high economic and political costs. An article by Tom Krebs and Isabella Weber.

 

The debt brake is not guarantee of a top rating – Guest commentary (German / Paywall) Moritz Kraemer, Handelsblatt, 19.03.2024 

A dogmatic insistence on the debt brake in the face of massive investment needs makes a German downgrade more likely. Moritz Kraemer is convinced of this. He is in favour of reforming the brake.

Tackling inequality vital for next century of growth, IMF head says – Full Article

Richard Partington, The Guardian, 14.03.2024

 

The head of the International Monetary Fund has warned that the only way to boost global economic growth over the next century is by tackling soaring inequality to achieve a ninefold increase in living standards.

 

Why the world cannot afford the rich – Comment

Richard G. Wilkinson & Kate E. Pickett, Nature, 12.03.2024

Reducing economic inequality is not a panacea for health, social and environmental problems, but it is central to solving them all.

Is the rich world stuck in an “upper income trap”? – Article (Paywall)

Tej Parikh, Financial Times, 15.03.2024

 

The western world has a growth problem. Further economic growth is possible, but the right policies are needed to unlock it.

 

How Thomas Piketty found politics – Full Article

Quinn Slobodian, The New Statesman, 14.03.2024

 

Ten years after publication, Capital in the Twenty-First Century remains a landmark study of inequality. Did it change anything?

 

Who pays for the war, the poor or the rich? – Article (Paywall / German)

Mark Schieritz, ZEIT Online, 10.03.2024

The Minister of Finance wants to cut social spending in order to finance defence spending. But there are alternatives, because defence policy is distribution policy.

What is AI’s Place in History? – Article (Paywall)

Carlota Perez, Project Syndicate, 11.03.2024

Artificial intelligence is almost certainly revolutionary in the sense that it will spawn new technology platforms, transform or eliminate many industries, and create new ones. But it must be understood as belonging to a larger, more mature technological revolution that began a half-century ago.

 

Do right-wing governments have higher deficits? – Article (Paywall / German)

Lea Elsässer & Leonce Röth, Makronom, 12.03.2024

Against the backdrop of the recent rise of the populist radical right, it is necessary to better understand what their fiscal policy looks like. In a study, Lea Elsässer and Leonce Röth provide new evidence on this.

 

The two Faces of Free Trade – Article (Paywall)

Dani Rodrik, Project Syndicate, 8.03.2024

 

Whereas free trade was once the central cause of progressive reformers seeking to combat entrenched interests on behalf of ordinary people, now it is the bête noire of both right-wing nationalists and the mainstream left. To understand why attitudes changed so radically, one must follow the money. 

 

OUR MAIN TOPICS

New Paradigm

NEW PARADIGM

After decades of overly naive market belief, we urgently need new answers to the great challenges of our time. More so, we need a whole new paradigm to guide us. We collect everything about the people and the community who are dealing with the question of a new paradigm and who analyze the historical and present impact of paradigms and narratives – whether in new contributions, performances, books and events.

Redefining
the role of
the state

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.

Remaking
finance

REMAKING
FINANCE

More than a decade after the financial crisis there still seems to be something seriously wrong with the financial system. Financial markets still tend to periodically misprice risk and contribute to boom and bust cycles. A better financial system needs to discourage short-termism and speculative activity, curtail systemic risk and distribute wealth more broadly.

Greening
prosperity

GREENING
PROSPERITY

During the high point of market orthodoxy, economists argued that the most 'efficient' way to combat climate change was to simply let markets determine the price of carbon emissions. Today, there is a growing consensus that prices need to be regulated and that a carbon price on its own might not be enough.

Reducing
inequality

REDUCING
INEQUALITY

The rising gap between rich and poor has become a threat to social cohesion in most rich countries. To reverse this trend it will be crucial to better understand the importance of different drivers of income and wealth inequality.

Innovation Lab

INNOVATION LAB

Do we need a whole new understanding of economic growth? What would be a real alternative? How viable are alternatives to GDP when it comes to measuring prosperity? These and other more fundamental challenges are what this section is about.

Globalization
for all

GLOBALIZATION
FOR ALL

After three decades of poorly managed integration, globalization is threatened by social discontent and the rise of populist forces. A new paradigm will need better ways not only to compensate the groups that have lost, but to distribute the gains more broadly from the start.

Europe
beyond markets

EUROPE
BEYOND MARKETS

The euro was planned during a period in which economic policy making was driven by a deep belief in market liberalism and the near impossibility of systemic financial crises. This belief has been brought into question since the euro crisis, which showed that panics do happen. New thinking needs to focus on developing mechanisms to protect eurozone countries from such panics and to foster economic convergence between members.

Corona Crisis

CORONA CRISIS

The current Corona crisis is probably the worst economic crisis of the post-World War 2 era. Economists are working hard on mitigating the economic effects caused by COVID-19 to prevent a second Great Depression, the break-up of the Eurozone and the end of globalisation. We collect the most important contributions.