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the New Economy Ticker
The latest news, debates, proposals and developments on new economic thinking at a glance.
Our Debt to Future Generations – Article
Jo Stiglitz, Project Syndicate, 14.06.23
No one argues that policymakers should not think about future generations. But, rather than focusing narrowly on financial debt, we should consider what kind of world we are bequeathing to our descendants, and what current policies and fiscal commitments will better serve their interests.
The inefficiency of growth in poverty reduction – Article (German)
Arthur Zito Guerriero, Makronom, 12.06.23
Global poverty has fallen sharply since the turn of the millennium – but this required high growth rates and brought with it great environmental burdens. And only a minimal share of the newly generated economic output actually benefited the poor, while it was mainly the rich income groups that profited.
Higher tax rate only for millionaires – With this idea the Union wants to rule again – Article (German)
Karsten Seibel, die Welt, 10.06.23
The CDU wants to relieve the burden on people with incomes of up to a little more than one million euros. Current calculations by the Taxpayers’ Association serve as a blueprint. Now only potential coalition partners have to agree.
National Sovereignty’s Silver Lining – Article
Dani Rodrik, Project Syndicate, 09.06.23
Despite the dire predictions that have accompanied the decline of global governance, less international cooperation does not necessarily mean disaster. In fact, national governments can prioritize domestic prosperity and social cohesion over multilateralism without harming the global economy.
The economy and banks need nature to survive – Blogpost
Frank Elderson, ECB, 08.06.23
Humanity needs nature to survive, and so do the economy and banks. The more species become extinct, the less diverse are the ecosystems on which we rely. This presents a growing financial risk that cannot be ignored, warns Frank Elderson, member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB.
Markups, Profit Shares, and Cost-Push-Profit-Led Inflation – Article
Michalis Nikiforos & Simon Grothe, INET, 06.06.23
To what extent is profit-led inflation compatible with what we know about the price-setting behavior of firms and income distribution?
Gender Pay Gap – From the Role – Article (German)
Helena Ott, ze.tt, 08.06.23
After the birth of a child, many women are stuck in mini-jobs and thus remain dependent on their partners. And the state? It does a lot to keep it that way.
16 Reasons For Fast Action – Tipping Points And Their Significance For Climate Policy – Article (German)
Vera Huwe, Levi Henze, Janek Steitz, Dezernat Zukunft, 07.06.23
A new background paper deals with tipping elements in the Earth system and the associated mechanisms and risks. Climate science research on tipping elements has recently made great advances in knowledge that have far-reaching implications for climate policy, but have gone largely unnoticed by the general public.
Revisiting the Behavioral Revolution in Economics – Article
Antara Haldar, Project Syndicate, 02.06.2023
Over the past 15 years, as behavioral sciences gained widespread recognition, economics has progressively acknowledged the significance of the biases that drive individuals and firms to behave irrationally. But the much-needed epistemic revolution has failed to materialize, owing to economists’ resistance to change.
A relief for worries about the future – Column (German)
Marcel Fratzscher, Die Zeit, 02.06.2023
The majority of Germans are in favour of an unconditional basic income, preferring a model with 1,200 euros per month. And above all out of fear of change.
Using artificial intelligence against artificial intelligence – Article (German, Paywall)
Roland Preuß, Süddeutsche Zeitung, 05.06.2023
AI is changing the everyday working lives of millions of employees. Can politics keep pace? In Hubertus Heil’s Ministry of Labour, they are trying – also with the help of new technology.
Earth past its safe limits for humans, scientists say – Article
Attracta Moorey, Financial Times, 31.05.2023
Activities have pushed 7 of 8 planetary boundaries into risk zones, research finds.
Fundamentally rethinking (learning) the economy – Blog post (German)
Lukas Bäuerle, Makronom, 01.06.2023
Many students perceive their economics education programmes as out of touch with reality. A teaching reform is overdue – and should be guided by certain principles.
Crisis of democracy – where are we still learning to get involved? – Podcast (German)
Petra Pinzler & Stefan Schmitt, Die Zeit, 31.05.2023
In cities and municipalities, there is a lack of people who get involved. How can democracy be promoted in concrete terms? We ask Elisabeth Niejahr from the Hertie Foundation.
(Not) Afraid of the Grim Reaper? – Blog post (German)
Moritz Gartiser, Makronom, 08.05.2023
A significant driver of inequality in Germany is the decline in the taxation of high wealth. An analysis of media coverage of inheritance tax now provides indications of how tax cuts are publicly commented on and legitimised.
A recent article portrays how the paradigm shift in US-economic policy is impersonated by Isabella Weber and her ideas on inflation.
This astounding turnabout reveals a transformation in how we conceptualize the global economy. If you can understand Weber’s once forbidden theories, you can understand just how dramatically Washington’s economic assumptions have changed during the past two years—and what this new thinking might mean for the country’s future… At Joe Biden’s first press conference as President, he pitched his $1.9-trillion American Rescue Plan by announcing that he wanted to “change the paradigm” in economic thought.
Read the whole article here.
‘Degrowth’ starts to move in from Europe’s policy fringes – Article
Martin Sandbu, Financial Times, 30.05.2023
Unorthodox economic ideas are finding a mainstream audience as climate change bites.
The eurozone won’t work without safe government bonds – Article
Fabian Lindner, Social Europe, 30.05.2023
The arcane notion of ‘monetary dominance’ lay behind the last eurozone crisis. Unless challenged, it could underlie another one.
What is the cost of the world? 630 trillion dollars – Article (German)
Henrik Müller, Der Spiegel, 28.05.2023
A new study calculates how much fixed assets are worth around the globe. Within two decades, the sum has quadrupled. This raises fundamental questions about our economic system.
The Deficit Myth is Hanging On for Dear Life – Blogpost
Stephanie Kelton, Substack, 30.05.2023
The old playbook is making a comeback. Democrats and Republics are closing in on a “debt” limit deal with the “Fiscal Responsibility Act”
The anti-social recession – Column (German)
Marcel Fratzscher, Die Zeit, 26.05.2023
The economy has slipped into recession. This hits people on low incomes especially hard. Especially for them, no recovery is foreseeable for years.
IIPP to establish a Public Sector Capabilities Index – Press Statement
26.05.2023
UCL IIPP, with support from Bloomberg Philanthropies, has launched a new research initiative to establish a public sector capabilities index – the first global measure of governments’ capacity to solve problems.
Pride and Misjudgement (Paywall, German)
Sebastian Thieme, FAZ, 23.05.2023
Economics refuses to engage in a dialogue with Plural Economics. Yet the latter has long been able to prove its criticism of the subject.
A trade-off entails that not all conflicting goals can be realised at the same time. There must be compromises and prioritisation. As Jean Pisani-Ferry writes in a recent article, the European Union seems to be avoiding an obvious trade-off between climate protection, competitiveness and debt rules at the moment.
The most prudent course would be for the bloc to ease fiscal constraints through a green carve-out or a common-debt scheme, backed by an agreement to increase its own resources. Admittedly, such a move would risk triggering macroeconomic instability. But it would be less harmful than sacrificing competitiveness or letting the multilateral system crumble. Insisting on fiscal rectitude may confront the EU with significant losses on other fronts. Contrary to what some European policymakers may believe, the transition to clean energy will not be costless. The choice facing European policymakers is straightforward: act now to address these costs, or pay a much higher price later.
Read the whole article 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.