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The latest news, debates, proposals and developments on new economic thinking at a glance.
IMF: Germany should invest more – Article
Winand von Petersdorff-Campen (Washington), FAZ, 25.10.2024
At the annual meeting of the IMF and the World Bank, criticism of the German debt brake does not fade away. Finance Minister Christian Lindner no longer wants to philosophise about austerity.
Economist estimates additional financing needs for public investment in Germany at half a trillion Euros – Article
Jens Südekum, Welt, 28.10.2024
According to estimates by economist Jens Südekum, the SPD and Greens’ investment plans are likely to cost half a trillion euros by 2030 – and they are causing controversy. The economic advisor to Federal Finance Minister Christian Lindner warns of an ‘economic flash in the pan’.
“The reading comprehension of economists is very limited” – says an economist – Article
Jannik Tillar im Interview mit Tom Krebs, Capital, 22.10.2024
What economists recommend to politicians is under-complex, says economist Tom Krebs. Some of the current problems are based on naive ideas about how the economy works.
The problem with boomer economists – Article
Maurice Höfgen, taz-Kolumne ‘Was kostet die Welt?’, 27.10.2024
Boomers explain the economy with the same old thoughts and awful phrases. Our new columnist puts an end to this.
US election: How can Germany and the EU steel themselves? –Article (Paywall)
FAZ OpEd by Lisandra Flach and Clemens Fuest, 28.10.2024
Trade relations with the USA will remain challenging regardless of the outcome of the election. However, there are some recipes for EU economic policy.
What is Kamalanomics? With James Politi – Podcast
FT Podcast The Economics Show with Soumaya Keynes, 21.10.2024
Adding up a candidate’s economic programm.
Women will decide America’s future – Article (Paywall)
Rana Foroohar, Financial Times, 28.10.2024
Where female voters go, the result of the US presidential election follows
“Great Power Politics” – Article
London Review of Books Vol. 46 No. 21, 7 November 2024
Adam Tooze on Bidenomics
Climate Change and Macroeconomic Models: Why General Equilibrium Models Do Not Work – Article
Yannis Dafermos, Andrew McConnell, Maria Nikolaidi, Servaas Storm, and Boyan Yanovski, INET, 28.10.2024
The limitations of the benchmark E-DSGE framework and how these limitations restrict the ability of this framework to meaningfully capture the macroeconomics of the climate crisis.
The wrong paradigm change – Article
Samuel Decker, Makronom, 17.10.2024
The state is intervening more and more in the economy. However, it would be premature to celebrate an economic paradigm shift.
Power, as well as price, matters in a well-run economy – Article (Paywall)
Rana Foroohar, Financial Times, 21.10.2024
That’s the lesson to take from both the founding of the Bretton Woods system 80 years ago and the Biden administration today.
Four economic truths that explain the US’s bizarre election – Article (Paywall)
Robert Armstrong, Financial Times, 17.10.2024
A trip to America’s number 3 shopping mall offers answers to what’s really going on.
Nobel Prize in Economics: Democracy is good for growth – Article (Paywall)
Alexander Hagelüken, Süddeutsche Zeitung, 15.10.20224
Economist Daron Acemoğlu explains why countries get rich or stay poor. The Nobel Prize in Economics awarded to him and two colleagues acts as a political signal – to Europe and the USA, where right-wing populists like Trump want to undermine democracy.
The Nobel for Econsplaining – Article (Paywall)
Brendan Greeley, Financial Times, 21.10.2024
Acemoglu, Johnson and Robinson won a prize for applying economics to the very things economics is inherently bad at figuring out.
The Colonial Origins of Economics – Commentary
Ingrid Harvold Kvangraven, Surbhi Kesar, Devika Dutt, Economic & Political Weekly, 19.10.2024
By providing an easy and elegant “answer” to the complex process of development, albeit a wrong one, Daron Acemoglu, Simon Johnson and James Robinson’s rise to prominence has lent support to a very particular understanding of development that is now prevalent in the discipline.
This is how Germany inherits – Article
Nathanael Häfner, ZEIT ONLINE, 20.10.20224
A study shows that Germans primarily bequeath cash to their descendants. It also makes it clear that wealth accumulates over generations.
Four-day week without loss of salary brings advantages above all – Article
Handelsblatt, 18.10.2024
Fridays off and still being paid like a full-time job: It sounds almost too good to be true. However, advocates of the four-day week believe it is practicable.
What does the SPD cost me? – Article (Paywall)
Mark Schieritz, ZEIT ONLINE, 15.10.20224
The Social Democrats want to burden the rich and relieve the poor with a tax reform. But who would really benefit? ZEIT ONLINE has done the maths.
Who Needs a New Economic Paradigm? – Article (Paywall)
Andrés Velasco, Project Syndicate, 10.10.2024
Most economists are allergic to grandiose calls for new agendas and paradigms. But useful paradigms are about principles, and a set of principles, organized around a paradigm, helps policymakers look for answers that are best for their countries, given their unique history.
Can Europe Create an Innovation Economy? – Article (Paywall)
Philippe Aghion, Mathias Dewatripont, Jean Tirole, Project Syndicate, 07.10.2024
After the 30 “glorious” years of economic growth following World War II, European policymakers failed to adopt the institutions and policies to promote disruptive innovation. Now, Europe urgently needs to adopt a new economic doctrine and reform agenda, or else it will continue to fall behind the United States and others.
How ‘excess wealth’ could be limited – Article (Paywall)
Lisa Nguyen, Süddeutsche Zeitung, 13.10.2024
In Munich, leading academics such as Thomas Piketty discuss how the gap between rich and poor could be closed. The model: a radical measure taken by the Federal Republic of Germany after the Second World War.
The unpleasant fiscal arithmetic holding back UK growth – Article (Paywall)
Andy Haldane, Financial Times, 11.10.2024
The scale of public investment required sits uneasily with the current fiscal rules but there is an escape route.
How a misdiagnosis has brought us into a permanent crisis – Article (Paywall)
Tom Krebs, Handelsblatt, 10.10.2024
Economists blame ageing, bureaucracy and a lack of motivation for the sluggish growth, thereby distracting attention from the real problems, diagnoses guest author Tom Krebs.
‘There is unity and yet nothing is progressing’ – Interview (Paywall)
Christian Rickens, Handelsblatt, 10.10.2024
The extremes seem to dominate German debates. Yet the consensus in Germany is broader than ever, says sociologist Steffen Mau in an interview. The state just doesn’t know how to utilise it.
The row between within the council of economic advisers escalates – Article (Paywall)
Patrick Welter, FAZ, 08.10.2024
The dispute within the German Council of Economic Experts, which has been smouldering for months, ends up in court. Veronika Grimm is suing the committee. It’s about a code of conduct.
Who will be US President, Allan Lichtman? – Interview
Interview by Rieke Havertz, Zeit Online, 08.10.2024
The historian reliably predicts who will win US elections. He analyses candidates like earthquakes. Sounds crazy, but it works. This election? It’s already decided.
SPD General Secretary questions Merz’s image of society – Article
Marc Röhlig, Der Spiegel, 14.10.2024
The SPD wants to tax the rich more, CDU leader Merz fears for the ‘high achievers’ in the country. The new SPD General Secretary Miersch is now using the quote for a decisive counterattack.
Progressives Weigh In on Kamala Harris’ Economic Proposals — and Share Some of Their Own – Article
Nick Romeo, Capital & Main, 02.10.2024
Experts say that policies such as higher taxes on the wealthy and expanded child care are both effective and popular.
How the US Lost the Solar Power Race to China – Article
David Fickling, Bloomberg Opinion, 30.09.2024
Bloomberg Opinion’s climate columnist visited Michigan, the former heart of the solar industry, and China to learn how good, old-fashioned capitalism won out.
The old US economic policy is dying and the new cannot be born – Article (Paywall)
Adam Tooze, Financial Times, 07.10.2024
Industrial rivalry and tensions with China frame a confused debate about the pressures of globalisation.
How economists are ruining our economy and dividing society – Article
Tom Krebs, Makronom, 07.10.2024
Germany is in a permanent crisis. This is due to the misdiagnoses of market-liberal economists who have found too much favour in politics. An article by Tom Krebs.
The perils of America’s chips strategy – Article (Paywall)
Rana Foroohar, Financial Times, 07.10.2024
Progress has been made at home, but what comes next abroad will make a big difference.
Harris’ ‘Opportunity Economy’ Closes The Economic Gap With Trump – Article
Richard McGahey, Forbes, 30.09.24
With a little more than 30 days left until the presidential election, Kamala Harris is emphasizing an “Opportunity Economy” as a centerpiece of her campaign. Although Donald Trump held a substantial polling lead over Joe Biden on economic issues, Harris is now virtually even with Trump on economics. How is her program closing the gap?
Top economist defends 1,000 euro premium – Artikel
Mark Schieritz, Zeit Online, 07.10.2024
The incentive to work for welfare recipients has been sharply criticised. Simon Jäger, one of the world’s leading labour market experts, now supports the idea.
Auto industry crisis is ‘receipt for ten to 15 years of management mistakes’ – Artikel (Paywall)
Jan Lutz, Clara Thier, Lina Knees und Martin Müller, Handelsblatt, 03.10.2024
Jens Südekum believes that the plight of German car manufacturers is self-inflicted. He also blames politicians. In an interview, he proposes a new bonus – but not for scrapping cars.
EU plans radical reorganisation of the budget – Artikel
Hendrik Kafsack, FAZ, 06.10.2024
Aid for refugees, social housing or organic farming: the EU wants to link financial support to reforms and goals, among other things. However, not everyone is enthusiastic about this.
„We have reached a critical point“ – Artikel (Paywall)
Intreview by Bernd Kramer, 24.09.2024
The American-Serbian economist Branko Milanović on growing inequality, our fatal illusion of living in a classless society – and the real problem of the constant technological revolution.
The debt brake is unique in the world – and uniquely dangerous – Artikel (Paywall)
Philippa Sigl-Glöckner, Wirtschaftswoche, 30.09.2024
The German debt brake is economically ill-founded and has undesirable effects. Why are we holding on to it? A guest article.
Kamala Harris’s Campaign Thinks She Can Win on the Economy. Here’s How. – Article (Paywall)
Shane Goldmacher, 26.09.2024, New York Times
Harris advisers point to a number of brightening public polls showing that Donald Trump’s lead is eroding on the critical question of whom voters trust most on the economy.
Harris Has a Manufacturing Agenda—in a Fact Sheet – Article
Her speech on the economy was guarded. The details laid out by the campaign paint a brighter picture.
David Dayen, The American Prospect, 26.09.2024
Trumponomics: the radical plan that would reshape America’s economy – Article (Paywall)
Colby Smith, Claire Jones and James Politi, Financial Times, 23.09.2024
In a bid to boost manufacturing, the Republican candidate is promising sweeping tariffs. Critics warn they would cause huge damage and heighten global tensions
The mastermind of the new right-wing populism – Article (Paywall)
Essay by David Bebnowski and Quinn Slobodian, Zeit Online, 28.09.2024
Hardly anyone in Germany knows Murray Rothbard. Yet his idea of a ‘paleo-coalition’ has not only influenced Javier Milei and Donald Trump, but also the AfD.
Leading economists are calling for the EU to promote workers rights. – Article
Tina Groll, Zeit Online, 30.09.2024
Over a hundred economists led by Thomas Piketty are calling for fairer wages from the EU. When it comes to contracts, the lowest price should not be the only deciding factor.
German Economy: “This crisis cannot be explained by ruined roads ” – Article (Paywall)
Interview: Marcus Gatzke und Marlies Uken, Zeit Online, 26.09.2024
The economy is simply not picking up speed. Why? Economist Tom Krebs on false faith in the market, the rise of the AfD and the underestimated consequences of the energy crisis.
New EU fiscal rule underestimates the dampening effect of saving – Article (Paywall)
Philipp Heimberger, Handelsblatt, 30.09.2024
The EU Commission is ignoring the extent to which its budget consolidation targets are dampening economic growth in Italy, for example. This is also harming Germany, warns guest author Philipp Heimberger.
The reformed Stability and Growth Pact jeopardises Europe – Article
Jan Ovelgönne and Achim Truger, Focus Online, 22.09.2024
The latest reform of the Stability and Growth Pact (SGP) was actually intended to ensure financial stability in the EU and promote growth. However, it now threatens to have the opposite effect.
Green financial politicians want to abolish tax privileges for the rich – Article
Christoph Schult, Spiegel, 27.09.2024
A Green Party paper calls for an end to the tax exemption of profits from property sales and a ‘billionaires’ tax’. One of the authors is Andreas Audretsch, the party’s designated future campaign manager.
Industrial Policy as Democratic Practice – Article
Amy Kapczynski, Democracy: A Journal of Ideas, 25.09.2024
Industrial policy can strengthen both our economy and our democracy—but we have to do it right.
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.