Summary:
Applying MMT in the EZ. The likely growth slowdown in the euro area in the coming quarters will be the trigger for this new phase of expansionist fiscal policy. However, uncertainty remains as to the scale and the implementation of the stimulus. If it is up to member countries, the stimulus is likely to be under-supplied as many governments will have little incentive to do much. Europe will face the same free-rider problem as in the past, with countries patiently waiting to benefit from the stimulus policies of their neighbours. The ideal scheme would be that of coordinated fiscal expansion through fiscal agreement or a proper common budget incorporating counter-cyclical mechanisms. That would involve highly sensitive political concessions, especially on risk-sharing, and high
Topics:
Mike Norman considers the following as important: expansionary fiscal policy, EZ, MMT
This could be interesting, too:
Applying MMT in the EZ. The likely growth slowdown in the euro area in the coming quarters will be the trigger for this new phase of expansionist fiscal policy. However, uncertainty remains as to the scale and the implementation of the stimulus. If it is up to member countries, the stimulus is likely to be under-supplied as many governments will have little incentive to do much. Europe will face the same free-rider problem as in the past, with countries patiently waiting to benefit from the stimulus policies of their neighbours. The ideal scheme would be that of coordinated fiscal expansion through fiscal agreement or a proper common budget incorporating counter-cyclical mechanisms. That would involve highly sensitive political concessions, especially on risk-sharing, and high
Topics:
Mike Norman considers the following as important: expansionary fiscal policy, EZ, MMT
This could be interesting, too:
Mike Norman writes Jared Bernstein, total idiot. You have to see this to believe it.
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Matias Vernengo writes On central bank independence, and Brazilian monetary policy
Michael Hudson writes International Trade and MMT with Keen, Hudson
The likely growth slowdown in the euro area in the coming quarters will be the trigger for this new phase of expansionist fiscal policy.
However, uncertainty remains as to the scale and the implementation of the stimulus. If it is up to member countries, the stimulus is likely to be under-supplied as many governments will have little incentive to do much. Europe will face the same free-rider problem as in the past, with countries patiently waiting to benefit from the stimulus policies of their neighbours. The ideal scheme would be that of coordinated fiscal expansion through fiscal agreement or a proper common budget incorporating counter-cyclical mechanisms. That would involve highly sensitive political concessions, especially on risk-sharing, and high execution risk, but this would be the most efficient way for the eurozone to avert an upcoming economic downturn.ZAWYA — A Thompson-Reuters site
A bigger bazooka
Christopher Dembik