Prime, Policy Research in Macroeconomics

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...

This is the first of two posts on the current crisis by Professor Massimo Amato, of Bocconi University, Milan. Well before the health emergency is over, the coronavirus crisis has already begun to produce devastating effects on the economy. This happens not only because the only accepted strategy, that of a lockdown, involves a strong slowdown in economic activity, but because the exposure of the economic system to expectations is such that the medium-term effects are so...

Acknowledgement: Wikimedia Commons In Britain as in the US, governments are tackling the corona virus by undertaking actions that force the closure or collapse of companies large and small. To compensate, they are stepping in with subsidies and bailouts. Because millions of livelihoods are at stake these interventions are welcome and necessary....

This piece first appeared in Tribune magazine on 23 March, 2020. It is reproduced here with some minor amendments. We are living through terrifying times. The greatest threat to humanity stems not just from a virulent superbug, but as scary -  the response to it. In Britain, as in the US, policy action is dictated by an ultra-nationalist government, which while pretending to “take back control” remains committed to a free-for-all for the owners of capital - globalisation. Both...

The following article was written for Tribune magazine, and published on 21 March, 2020. A heavy price is being paid by the world’s poorest for the ongoing commitment to the internationalisation of capital – and for the role globalisation plays in transforming epidemics into pandemics, and health crises into systemic financial crises.  Millions of people living in low income countries are now threatened by the lethality of the corona virus; by economic failure at home, and...

Photo - Black swans in Regent’s Park, London - by Jeremy Smith T. Sabri Öncü ([email protected]) is an economist based in İstanbul, Turkey. This article was written on 8 March 2020 and first published in the Indian journal Economic and Political Weekly on 14 March 2020.Whether a black swan or a...