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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.

LATEST NEWS

THE STATE 10 JUNE 2022

Actors beyond Government - Talk between Francesca Bria and Christian Kastrop

What different forms of collective action beyond government are crucial for democracy? Francesca Bria and Christian Kastrop discussed this question at our X New Paradigm Workshop.

NEW ECONOMY SHORT CUT 14 June 2022

Concerted Action - Preventing the Wage-Price Spiral?

THE STATE 10 JUNE 2022

Actors beyond Government - Talk between Francesca Bria and Christian Kastrop

What different forms of collective action beyond government are crucial for democracy? Francesca Bria and Christian Kastrop discussed this question at our X New Paradigm Workshop.

NEW ECONOMY SHORT CUT 14 June 2022

Concerted Action - Preventing the Wage-Price Spiral?

KNOWLEDGE BASE
REDEFINING
THE ROLE OF
THE STATE

The Challenge

Decaying infrastructure and a lack of investment in education and innovation expose the weaknesses of an overly market-driven paradigm.

What went wrong

Reducing the role of the state in the economy was seen as the best way to ensure high levels of growth.

New Economy in Progress

The challenges of our time require us to rethink the role of the state and the need for a more active fiscal policy.

5 POSSIBLE WAYS THAT ARE DISCUSSED TO REDEFINE THE ROLE OF THE STATE

1

Boost investment in education, healthcare, infrastructure. This could more than pay for itself.

2

Use fiscal policy as a tool for macroeconomic stabilization and to boost economic activity.

3

Use of state as an entrepreneurial actor, investing in and deploying new technologies.

4

Central banks could distribute money directly to citizens in an attempt to boost consumer confidence and consumption.

5

Demonstrate the indispensability of the state by tackling monopolistic capitalism.

THE STEEP DECLINE IN NET PUBLIC INVESTMENT

THE STATE 10 JUNE 2022

Actors beyond Government - Talk between Francesca Bria and Christian Kastrop

What different forms of collective action beyond government are crucial for democracy? Francesca Bria and Christian Kastrop discussed this question at our X New Paradigm Workshop.

NEW ECONOMY SHORT CUT 14 June 2022

Concerted Action - Preventing the Wage-Price Spiral?

THE STATE 7 JUNE 2022

How to Make the State Better

Fritzi Köhle-Geib, Max Krahé, Thurid Hustedt, and Erkki Karo on how to re-design a modern and pro-active state.

THE STATE 2 JUNE 2022

Regional Disruptions – A Pro-Active Government Beyond Redistribution

Jens Südekum presented results of his Forum study on proactive measures against regional upheavals at our X New Paradigm Workshop.

THE STATE 31 MAY 2022

On the Impact of Sanctions – The Case of Putin’s Russia

Robert Gold presented new research on the highly topical question of the political effects on the sanctions imposed on Russia at our X New Paradigm Workshop.

THE STATE 31 MAY 2022

Market versus State - Beyond the Old Dichotomy

Wendy Carlin, Paul de Grauwe, Xavier Ragot and Henning Vöpel on the new balance between state and market and the signs for a paradigmatic shift.

THE STATE 29 APRIL 2022

Why Public Value Creation Should Be Brought Back to the Center Stage of the Economy

In a recent contribution, Mariana Mazzucato and Josh Ryan-Collins argue that governments should move from market-fixing to market-shaping, creating a revised concept for public value.

THE STATE 25 MARCH 2022

Super Depreciations – The recession remedy? Short Cut Highlights

In its coalition agreement, the traffic light government announces an investment premium for "climate protection and digital assets" - the "super depreciation". What economic effects does the government expect from the bonus? Clemens Fuest, Sandra Detzer, Achim Truger and Markus Herbrand in Short Cut.

NEW PARADIGM WORKSHOP 24 MAY 2022 – 25 MAY 2022

New Roles for the State: Rethinking Government at the Turning of Ages

THE STATE  | NEW ECONOMY SHORT CUT 15 March 2022

100 Billion for the Bundeswehr – A Turnaround in Fiscal Policy?

The German armed forces are to receive 100 billion - without violating the debt limits. What does this mean for the course of the Federal Minister of Finance? Will savings have to be made elsewhere? Watch the discussion with Sebastian Dullien, Jens Südekum, Hubertus Bardt and Philippa Sigl-Glöckner as re-live.

OTHER 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.

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.