Prime, Policy Research in Macroeconomics

By T.Sabri Öncü & Ahmet Öncü This article first appeared in the Indian journal, Economic and Political Weekly on 18 April 2020. The authors’ contact details are at he foot of this article.Abstract Based on the German Currency Reform of 1948 and the “Modern Debt Jubilee” of Steve Keen, a globally coordinated orderly debt deleveraging mechanism is proposed to address the global debt overhang problem. Since the global debt overhang and lack of sufficient climate finance...

Extract from Resolutions of Brussels International Financial Conference 1920 SummaryThe UK is experiencing, as a result of the COVID 19 crisis and response, its most severe economic downturn on record; the largest in the last century was in 1921, when annual GDP fell by 9.7%.  In assessing the likely level of the fall, the Office for...

The following article appeared on The Correspondent’s website on 17 April, 2020 With acknowledgement to HiltonT for the image of the President Steyn Gold Mine in Welkom, Orange Free State. I was born and grew up in a dusty, sparsely populated gold mining town on the bare and vast ‘veld’ of the Orange Free State, South Africa. As a child, my town’s dependence on the extraction of gold at a price fixed in Washington, opened my eyes to the architecture of the international...

“The economic mechanism of Europe is jammed.” - J M Keynes [1] The Dutch finance minister Wopka Hoekstra is somewhat brazen. Like his German counterpart, he caused consternation across the Union by rejecting a ‘Coronabond’ – a scheme for raising finance for EU countries tackling the coronavirus crisis; a scheme that would have lowered the cost of debt for many countries. A conservative German economist, who had earlier rejected the concept of shared liability, predicted...

This year marks Prime's 10th anniversary, a decade in which we have opposed the politics and economics of austerity, and argued for a new international financial system and transition to the post-carbon society. To mark our anniversary, we decided – before the current COVID 19 lockdown – to revamp our website, and (we hope) provide a better web experience and more quality content for our readers. We would be very grateful if you could take just a few minutes to answer our...

Image with acknowledgment to Needpix . “Give a man a fish, and you feed him for a day… But give him a loan to buy a boat and net to fish, and he will end up paying you all the fishes he catches.” By Michael Hudson, with Dirk Bezemer, Steve Keen and Sabri Öncü This article first appeared in Naked Capitalism  on 10th April  2020Summary After...

This is the second of two posts on the current crisis by Professor Massimo Amato, of Bocconi University, Milan. The first, “Lessons to be learnt”, was posted on PRIME on 31st March A new institutional architecture must be thought of. First of all for Europe. Europe has always thought of itself as an experiment and as a process. Now the time has come to experiment with new paths, in view of a new structure after the crisis. In these days, people speak more and more...

“The Bank has always held itself bound to the extent of its power to render the assistance required by the Treasury in any exigency and under any condition of the Money Market.” – James Currie, Governor of Bank of England, July 1885 to Lord Salisbury, Prime MinisterThe new agreement between Government and Bank of England to make the Government’s overdraft with the Bank (the Ways and Means Facility) open-ended has been characterised as direct “monetary financing” of...

This post argues that the new Governor of the Bank of England is wrong to address the Bank’s role in the crisis through the prism of traditional ‘price stability targeting’. Rather, the Bank’s duty and task is to support the government’s economic (including fiscal) policies, and in particular - and in so doing - to act to protect the financial stability of the whole system. Actions to support the Bank’s monetary and financial stability objectives need to be integrated.On...

Nature of the Health Crisis The current health crisis has similarities to the Great Recession of 2008-2009, though fundamentally different.  The crisis ten years ago resulted from collapse of financial institutions, a purely human-made disaster whose solution should have been obvious.  The financial collapse provoked a severe contraction in...