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the New Economy Ticker
The latest news, debates, proposals and developments on new economic thinking at a glance.
Mario Draghi: Radical Change—Is What Is Needed – Full speech
Groupe d’études géopolitiques, 16.04.2024
During his speech at the High-level Conference on the European Pillar of Social Rights in Brussels, Mario Draghi critically reflected on past ECB policies and failures.
America’s Manufacturing Renaissance Will Create Few Good Jobs –Article
Project Syndicate, Dani Rodrik, 16.04.2024
Many countries’ recent experiences show that boosting manufacturing employment is like chasing a fast-receding target. Automation and skill-biased technology have made it extremely unlikely that manufacturing can be the labor-absorbing activity it once was, which means that the future of “good jobs” must be created in services.
Neoliberalismus –Article (in German, Paywall)
Mark Schieritz, die ZEIT, 17.04.2024
After the global financial crisis, capitalism was supposed to become kinder, gentler and more sympathetic – now the top representatives of the traffic light party are talking about “economic turnaround” and “longer working hours”. Is the vocabulary of the market believers bringing back what the SPD and Greens have been fighting for years?
Wealth Inequality in Germany is Growing – Article (in German)
Die ZEIT, 15.04.2024
High price and interest rate increases hit poorer households particularly hard. According to the Bundesbank, the differences between rich and poor will therefore widen again from the end of 2022.
Social Desintegration: Breeding Ground for Right-Wing Extremism – Blog (in German)
Johanna Ritter, sozialpolitikblog-Interview, 11.04.2024
Bettina Kohlrausch, Director of the WSI, talks in an interview about the complex connections between loss of recognition, the world of work and the rise of right-wing extremism.
The recent political agreement between the Council and the European Parliament has introduced new numerical benchmarks for debt and deficit, requiring annual reductions that may lead to unjustified budget cuts.
A study by NEF and ETUC has compared the budget rules with estimated gaps in social and environmental investment and found that only Denmark, Sweden and Ireland can adequately fund their investment needs under the new rules. Even if the Recovery and Resilience Facility (RRF) grants were extended beyond 2026, only Croatia and Lithuania would join the aforementioned trio in meeting the minimum requirements for social and environmental investment. For all Member States to meet their public investment commitments in these areas, an additional €300-420 billion per year (equivalent to 2.1-2.9% of EU GDP) would be needed.
Infrastructure Spending Lowers Right-Wing Populists’ Vote Shares – Article (German)
In many EU countries, the poll ratings of right-wing populist parties are high – they could triumph in the European elections in June. Economists have researched how governments can take countermeasures.
Zero-Sum-Thinking Is Preventing Solutions – Article (German)
Marcel Fratzscher, ZEIT Online, 12.04.2024
Neoliberalism has failed, now a zero-sum mindset with winners and losers dominates politics and society. It is poison for cohesion.
Juliana Kaplan, Business Insider, 09.04.2024
Angus Deaton was awarded the Nobel Memorial Prize in Economic Sciences in 2015. The economist has been studying consumer decisions, welfare, inequality and poverty for decades. Now he is rethinking some of his earlier views on trade unions, free trade and immigration.
Nonsense and Bad Rules Persist In Banking – Article (Paywall)
Anat Admati, Project Syndicate, 08.04.2024
While banks and the policymakers that support them claim that banking regulations would harm average Americans, these threats are based on falsehoods and misinformation. Simpler, more effective rules would compel banks to rely more on their own equity, thus forcing them to overcome their addiction to borrowing.
Julius Betschka, Tagesspiegel, 11.04.2024
A survey by the Bertelsmann Foundation is likely to give new impetus to the debate on reforming the debt brake. This is made clear by a majority of Germans.
Forget Boomers vs Millennials, The Next Conflict Is Millennials vs Each Other – Article (Paywall)
Financial Times, John Burn-Murdoch, 12.04.2024
Growing wealth inequality between thirtysomethings could soon displace tensions between young and old.
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.
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.