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the New Economy Ticker
The latest news, debates, proposals and developments on new economic thinking at a glance.
In its recent monthly report, Germany’s central bank has issued a stark warning about the country’s economic vulnerability due to its heavy reliance on trade with China. The report identified several key factors putting Germany’s “business model” at risk, including its dependence on China, high energy prices, and labor shortages. According to the Bundesbank, de-risking from trade with China also adds to the economic slowdown, with the IMF expecting 0.3% shrinkage in growth for 2023.
Read the whole report (in German) here, which is also featured in a recent Financial Times article here.
Thinkin’ Bout a Revolution – Article (German)
Branko Milanovic, Makronom, 07.09.2023
The seemingly anti-capitalist revolution of 1968 made the world safe for capitalism – and strengthened the positions of the right.
Unequal Germany: Socio-economic Disparities Report 2023 – Study (German)
Friedrich-Ebert-Stiftung, September 2023
Inequality between urban and rural regions as well as differences between economically dynamic regions and those affected by structural change – Germany is a socially and spatially unequal country.
Olaf Scholz, the improbable role model – Article
Robert Misik, Social Europe, 04.09.2023
A state that protects—and a bulwark for democracy and modernity. Is this, Robert Misik asks, the new paradigm of the democratic left?
The EU is poised for a giant leap towards further integration – Column
Martin Sandbu, Financial Times, 04.09.2023
There is increasingly serious talk in the bloc about all manner of far-reaching reform.
G20 must forge agreement to increase tax on rich, say campaigners – Article
The Guardian, Larry Elliott, 05.09.2023
Letter from almost 300 millionaires, economists and politicians says urgent action needed to prevent extreme wealth.
Inequality and Democracy – Article
Joseph Stiglitz, Project Syndicate, 31.08.2023
With the right political reforms, democracies can become more inclusive, more responsive to citizens, and less responsive to the corporations and rich individuals who currently hold the purse strings. But salvaging democratic politics also will require far-reaching economic reforms.
On the occasion of its 5th birthday, Finanzwende e.V. in cooperation with the Friedrich Ebert Foundation is organising a panel discussion in Berlin on 13.09.2023 at 18:00.
Against the background of the climate crisis and the increasing financialisation of areas such as health or housing, questions are being raised about the role of the financial market in these developments. The panel discussion will focus on how the financial market must be promoted, realigned and pushed back for a social and ecological transformation. The panelists will be: Claudia Kemfert, Gerhard Schick, Jörg Asmussen and Reiner Hoffmann. Verena von Ondarza will moderate.
Register here.
New Eu Fiscal Rules Jeopardise Investment Needed To Combat Climate Crisis – Study
Sebastian Mang & Dominick Caddick, New Economics Foundation, 31.08.2023
A desperately needed reform of the EU’s fiscal rules is finally underway. However, the proposed rules put forward by the Commission are irresponsible – they jeopardise the public investments needed to combat climate change.
Welcome to the big nineties show! – Column (German)
Lenz Jacobsen, die Zeit, 22.08.2023
Sick man of Europe, social tourism, jerk: the CDU is bringing back the rhetoric of the nineties. That possibly says more about the party than about the present.
“We degrade the human being to a stooge” – Interview (German, Paywall)
Interview Benjamin Bidder, der Spiegel, 25.08.2023
The rich and powerful have hijacked innovations at all times, says top economist Daron Acemoğlu – already in the Middle Ages and now also in the age of artificial intelligence. Is Silicon Valley plunging humanity into misery?
Merz calls for fundamental debate on willingness to perform – Article (German)
Der Spiegel, 31.08.2023
CDU-Chef Friedrich Merz fürchtet um den Wohlstand in Deutschland. Verantwortlich für die abnehmende Wirtschaftsleistung ist seiner Ansicht nach die Ampelkoalition. Leistung werde von der Regierung bestraft.
Rethinking Growth and Revisiting the Entrepreneurial State – Article
Mariana Mazzucato, Project Syndicate, 28.08.2023
While important, economic growth in the abstract is not a coherent goal or mission around which governments should orient their policymaking. The kind of inclusive, sustainable, and robust growth that they want ultimately comes as a byproduct of pursuing other socially beneficial collective ends.
The five global economic shifts happening now – Article
Chris Giles, Financial Times, 29.08.2023
As uncertainty and inflation challenge central bankers and policymakers, they must also adapt to structural changes.
Germany underestimates the biggest growth risk – Commentary (German)
Julian Olk, Handelsblatt, 28.08.2023
The relegation rhetoric is at best partially justified. The real problem is that there is little political pressure where the need for reform is greatest.
Financial security of families determines educational advancement – Article (German)
Zeit Online, AFP, 28.08.2023
A study by the Institute of the German Economy shows which factors determine the educational path of children. The biggest hurdle is financial problems.
In a recent blogpost based on their study, Charlotte Bartels, Felix Kersting and Nikolaus Wolf test the claim by traditional Marxists who believe that capital accumulation leads to income inequality and support for socialism.
The authors find that while capital accumulation intensified income inequality, it did not necessarily bolster support for socialism. Moreover, trade unions played a pivotal role in curbing income inequality. The findings highlight the role of historical, institutional, and technological factors in shaping capitalist trajectories, suggesting that a one-size-fits-all approach may be insufficient.
Read the whole column here.
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.