FINANCIAL WORLD EUROPE

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 5 AUGUST 2022

The Adventures of Money

A new article on contemporary monetary questions based on two recent books on the nature and the history of money.

THE STATE 27 JUNE 2022

Concerted Action - Preventing the Wage-Price Spiral? Short Cut Highlights

Chancellor Olaf Scholz has announced that he will bring together employers and unions in a "Concerted Action" to discuss tackling inflation. Can such an alliance prevent a wage-price spiral?

THE STATE 5 AUGUST 2022

The Adventures of Money

A new article on contemporary monetary questions based on two recent books on the nature and the history of money.

THE STATE 27 JUNE 2022

Concerted Action - Preventing the Wage-Price Spiral? Short Cut Highlights

Chancellor Olaf Scholz has announced that he will bring together employers and unions in a "Concerted Action" to discuss tackling inflation. Can such an alliance prevent a 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

21 JULY 2021

The disenchanted state

THE STATE 1 JULY 2021

How much debt is too much?

In light of record levels of public debt, the question of how much debt is too much debt is on the table. Four economists have now discussed this question in a panel discussion.

THE STATE 22 JUNE 2021

“Trickle-down economics has never worked.”

US president Joe Biden calls to build the US economy from the middle and bottom up – a clear opposition to tax cuts for corporations and the rich.

THE STATE 18 JUNE 2021

How German companies feel about key election issues - A mood survey

How do German companies view key campaign issues such as industrial and climate policy shortly before the election? Deutsche Bank surveyed 200 companies on this issue - with surprisingly heterogeneous results.

THE STATE 27 MAY 2021

Beyond the debt brake – Towards a more flexible German fiscal policy?

At the moment, there is much debate about the German debt brake. At the VIII. New Paradigm Workshop, Philippa Sigl-Glöckner and others discussed a proposal for a reform commissioned by the Forum New Economy.

THE STATE 23 APRIL 2021

Controversy over rent cap

What are the current economic debates on housing? A brief overview of the most important points of contention.

THE STATE 16 MARCH 2021

Makronom Series on the Relationship between the Market and the State in the Post-Corona Age

COVID19 and the climate crises, growing inequality and financial market stability: almost everywhere, the relationship between markets and governments needs to be re-examined. A review of the series in the online magazine Makronom.

THE STATE  | SEMINAR 24 February 2021

Stephan Weil on the challenges for the automotive location Lower Saxony

At our recent seminar on the transformation of the German car industry, the Minister President of Lower Saxony talked about the implications of the transformation of the German car industry for the Volkswagen region and the state government's contribution.

THE STATE 18 DECEMBER 2020

A Debt Brake for the 21st Century

In a newly published piece on Makronom, Philippa Sigl-Glöckner lays out her formula for a reform of the German debt brake.

THE STATE 27 NOVEMBER 2020

Mariana Mazzucato & Rainer Kattel in the FAZ: "The State must do better"

In a guest article for the Frankfurter Allgemeine Sonntagszeitung, Mariana Mazzucato and Rainer Kattel plead not for more or less state, but for a better one.

THE STATE 22 NOVEMBER 2020

New Economy Working Paper - Challenge-driven economic policy - A new framework for Germany

A new study by Mariana Mazzucato and her team from the Institute for Innovation and Public Purpose at University College London

THE STATE 16 NOVEMBER 2020

New Economy Working Paper out – A new paradigm for Germany’s fiscal policy after Corona

A new study by Michael Hüther (IW Köln) and Jens Südekum (DICE) looks into the past and the future of the German debt brake.

NEW ECONOMY SHORT CUT 4 November 2020

New Economy Short Cut on the US Election Outcome

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.