Five years into the crisis, the global recovery remains supported by policies[1]. In 2014, monetary policy will remain accommodative, to facilitate the healing of the financial system and private sector deleveraging. While the Federal Reserve (Fed) will gradually reduce quantitative easing (QE), the European Central Bank (ECB) and the Bank of Japan (BoJ) are likely … Read more
A universal basic income (UBI) and unemployment insurance (UI) are two possible forms of social insurance for an economy in which job loss is a significant risk. Which works better? How generous should either program be? Would a combination of the two be best of all? These are the questions that Alice Fabre, Stéphane Pallage, … Read more
During the last year, the conflict in Ukraine has come perilously close to a state of full-blown though undeclared war.Looking back over the past 12 months, we’ve seen a seismic shift in the political makeup of the region. Russia has effectively annexed the Crimean Peninsula, which includes the city of Sevastopol, home of the Russian … Read more
I generally follow the convention of referring to monetary policymakers as “hawks” or “doves.” But what really do these terms mean? Are they appropriate or meaningful distinctions? On this topic, Cleveland Federal Reserve President Sandra Pinalto says: I’ve been part of the Federal Reserve for a long time, more than 28 years. Those labels actually … Read more
OK, file this in the “I never thought I’d live to see the day” category. Yes, Virginia, Taxes Drive Money. Peter Thiel, founder of PayPal understands his business model. He’s leveraging currency. His PayPal money is denominated in Uncle Sam’s money (and 24 other national currencies). Ultimately, USA demand for PayPal money is driven by … Read more
Japan’s recession is not paving the way for sustained growth. It is prolonging new debt and liquidity and thus deteriorating fiscal discipline. In the last quarter, Japan’s economy fell into recession. In the West, it was characterized as “unexpected.” The realities are precisely the reverse. With its third ’lost decade,’ Japan has entered an era … Read more
The just concluded G-20 meeting in Australia repeats many themes and patterns set at earlier G-20 meetings. Those at the Australian Treasury who planned this year’s G-20 economic policy strategy have shown little macroeconomic policy imagination. By adding to the supply-side structural reform plans identified in earlier G-20 meetings (but not fully implemented), and failing … Read more
Outside Iceland it is widely believed that the collapse of the Icelandic financial sector in October 2008 came at no expense to Icelandic taxpayers. This contrasts with taxpayers in Ireland, the UK, Greece, Spain and Portugal, who have recapitalized their banking sectors. However, based on a recent estimate of public funds put into the financial … Read more
The euro area urgently needs growth perspectives. While the OECD and other international organizations advocate a green growth strategy, at the moment the euro area contributes mostly to the greening by shrinking its economy. In this column we argue in favour of a classic “golden rule” rather than the one proposed by the fiscal compact. … Read more
Sorry for the near-hiatus over the past weeks–I’ve been doing a lot of traveling. Here’s a good post on the current sorry state of economic policy in the US and Europe: http://www.marketwatch.com/story/obsolete-dogmas-are-crippling-the-world-economy-2014-11-14?page=2 The author, Darrell Delamaide, gives a shout-out to MMT: MMT, which bases models on the reality that the U.S. dollar is a fiat … Read more