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the New Economy Ticker
The latest news, debates, proposals and developments on new economic thinking at a glance.
IMF calls for shake-up of EU borrowing powers and debt rules – Article
Sam Fleming, FT, 05.09.2022
Reform of bloc’s fiscal framework cannot wait and new downturn fund needed, says fund policy paper.
Where the State should invest – Policy Paper (German)
Levi Timon Henze, Ekaterina Jürgens, Christoph Paetz, IMK Policy Brief, August 2022
The majority of Germans are dissatisfied with the public infrastructure. On a national average, a good two-thirds call for higher state investment. However, the priorities differ between urban and rural areas as well as between East and West.
The energy crisis and the massive international wealth transfer – Column
Martin Sandbu, FT, 01.09.2022
The distributional consequences of high prices are enormous between countries as well as within them.
More equality is possible – Article (German)
Stefan Reinecke, Taz, 30.08.2022
In “A Brief History of Inequality”, Thomas Piketty focuses on redistribution as the path to more justice. How remains open.
Germany’s “working class” is facing a hard winter: “Many have not yet grasped the extent of the crisis – not even politicians”. – Interview (German)
Julia Friedrichs interviewed by Georg Ismar (Tagesspiegel), 28.08.2022
The savings tips for the crisis are not much use to the poorer part of society. Julia Friedrichs in an interview about the people who can no longer save.
Achieving Net-Zero Emissions Requires Closing a Data Deficit – Blogpost
Charlotte Gardes-Landolfini & Fabio Natalucci, IMF-Blog, 23.08.2022
High-quality, reliable, and comparable gauges are lacking. Here’s how to close the gap.
Mind the Policy Gaps – Article
Robert Skidelsky, Project Syndicate, 22.08.2022
The widening gaps in policy formation nowadays reflect the division of labor and increasing specialization that has taken us from the sixteenth-century ideal of the Renaissance man. And today’s biggest policymaking gap has grown so large that it threatens global catastrophe.
Beyond GDP: changing how we measure progress is key to tackling a world in crisis – Article
Paul Allin, Diane Coyle & Tim Jackson, The Conversation, 18.08.2022
It’s an odd quirk of history that, on the first day of his ill-fated presidential campaign in March 1968, Robert F Kennedy chose to talk to his audience about the limitations of gross domestic product (GDP) – the world’s headline indicator of economic progress. It seems stranger still that, despite the power of that iconic speech, growth in GDP remains to this day the predominant measure of progress across the world.
The greatest potential on the labor market are women – Article (German)
Marcel Fratzscher, Die Zeit, 19.08.2022
The shortage of skilled workers can be better combated than with retirement from 70. The government must finally remove the obstacles for women on the labour market.
What actually is financialisation? Why are more and more areas of life and the economy becoming the target of speculation? A new video series gives a first insight into the topic:
Here is some more information on this topic.
How working time exacerbates inequality – Article (Paywall, German)
Alexander Hagelüken, Süddeutsche Zeitung, 18.08.2022
Many young professionals and mothers would like to work more, but are not allowed to – while high earners have to work more than they want to. What the state can do about it.
Gas surcharge drives inflation: This is how gas prices could still be capped – Article (Paywall, German)
Julian Olk, Handelsblatt, 16.08.2022
The amount of the new levy is fixed. Economists expect the inflation rate to rise significantly. Calls for a price cap are growing louder.
Federal government agrees on principles for reform of EU fiscal rules – Press release (German)
BMWK, August 2022
The German government has agreed on principles for a reform of the EU fiscal rules. It will introduce these as the German position in the European discussion on the next reform of the Stability and Growth Pact in the coming months.
In the current times of crisis, Christian Lindner never tires of emphasising that the belt must be tightened because of hard times and categorically insists on compliance with the debt brake: “We must not allow ourselves politics on credit”. The other side of the coin is the revenue side of the state, which, according to the Ministry of Finance, should not be tampered with either – as respect for performance (“Leistung“). Yet it would not take a broad increase in income tax or a war soli to generate additional revenue for public budgets.
In a new essay, Gerhard Schick calls for a reform of inheritance and gift tax in order to relieve the state budget. He says it is a matter of correcting privileges for the super-rich that have been created over the last 30 years, such as the lower taxation of capital and real estate income compared to earned income. Inheritance is purely a matter of luck and a lax inheritance tax therefore has nothing to do with respect for performance. The main argument for exempting business assets from inheritance tax is that this would secure jobs, even though this position was challenged already years ago by a report of the Scientific Advisory Board at the Ministry of Finance.
Read the whole essay in German here (paywall).
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.