“real life” is just an interruption.
10 minutes ago
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The Failed Political Economy of the Euro Crisis
The euro crisis has been extensively discussed in terms of economics, finance, political intrigues, and European institutions, but a key aspect—the political economy of the crisis—has received little attention. Politicians and social scientists from emerging economies, not least from Eastern Europe, look with amazement at this oversight. Europeans need to absorb and apply the lessons [...]
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The Next Strategic Target: De Gaulle’s EU Legacy
When Mario Draghi delivered his first prepared public remarks as president of the European Central Bank (ECB) in Frankfurt on Nov. 8, he provided several clues about the coming eight years. Conscious of taking charge in the midst of the bank’s and the euro area’s first major financial crisis, he dwelled first on monetary policy, [...]
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The Last Bullet
US policymakers are running out of options to solve our massive unemployment problem and get the economy growing again. The Administration’s jobs bill faces resistance in Congress. The best option that can be implemented without a vote of Congress is to work through the market that started this mess in the first place—housing. The Administration [...]
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The Link Between China’s Property Market and Local Government Finances
The importance of the property market to China’s investors, savers and banks is well known, but its impact on local governments is less well understood. The ability of Chinese local governments to service the debt they have built up over the past several years, 10.7 trillion RMB at the end of 2010, relies heavily upon [...]
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The Internal Cost of China’s Currency Policy
By Joseph E. Gagnon, Nicholas R. Lardy, and Nicholas Borst It is currently costing the Chinese central bank about $240 billion per year to hold down the value of the Chinese currency relative to other currencies. This cost is growing rapidly. The cost would decrease significantly if China allowed its currency to float and began [...]
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Europe’s Made-in-America Tools to Deal with Its Financial Crisis
As the epicenter of the global financial crisis has migrated from the US financial system in 2008 to the “submerging economies” in Europe, so also has the need for innovative solutions moved from Washington and New York to Paris, Frankfurt, and Berlin. This is appropriate because it was naïve German Landesbankers, irresponsible European real estate [...]
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Stop Sticking Our Heads in the Sand! A Plan for Action on Jobs
Despite the claim that previous weeks’ jobs numbers were “better than expected,” they were in fact an abysmal indictment of US economic policy over the past two years. The unemployment rate has remained near or above 9 percent for 28 consecutive months, a policy failure not seen since the Great Depression of the 1930s. Unfortunately, [...]
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Can a Debt Ceiling Be Sensible? The Case of Denmark II
In response to many inquiries prompted by my previous posting about the debt ceiling in Denmark, I thought it sensible to add a few more details about the origins of the Danish debt ceiling and how and why it has been changed over the years. The Danish debt ceiling was first instituted by law in [...]
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Tax Reform and Consumption-Based Tax Systems
Congressional testimony submitted to the US House Ways and Means Committee hearing on “Tax Reform and Consumption-based Tax Systems” July 26, 2011 This testimony draws on joint work with Peter Boone and James Kwak. Underlined text indicates links to supplementary material; please see also BaselineScenario.com, where we also provide daily updates and detailed policy assessments [...]
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Washington and Kiev: Progress and Problems
On July 7, three prominent Washington think tanks — the Atlantic Council, the Brookings Institution and the Peterson Institute for International Economics — organized a big conference on Challenges and Impact of Governance in Ukraine. It was held at the Peterson Institute in Washington. This conference attracted no fewer than 300 participants, including 50 representatives [...]
