Tag Archives: austerity

The management of the economic crisis has had devastating consequences for our country, as well as for the eurozone as a whole. The fiscal austerity and wage reduction policies imposed over the last few years have unnecessarily prolonged the recession across the continent and generated deep social fractures by increasing economic and social inequalities.Fiscal austerity and wage reduction policies have led us to a lost decade. Across the Eurozone, we haven’t yet regained pre-crisis level of...

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Should Greece leave the Euro? That was the title of the Oxford debate at the Prague Summit in which I had the pleasure of participating yesterday.But this is the wrong question. Unless there is a considerable shift in Eurozone politics, Greece WILL leave the Euro - eventually. The question is when, and how.To see this, we need to look at the motivations of all the players involved in the negotiations. The Greek negotiations resemble a "prisoner's dilemma", in which the best outcome for...

There are three kinds of lies, "lies, damned lies, and statistics," supposedly said Benjamin Disraeli. This applies to John Cochrane piece in the Wall Street Journal today. Cochrane says that: "Sclerotic growth is America’s overriding economic problem. From 1950 to 2000, the U.S. economy grew at an average rate of 3.5% annually. Since 2000, it has grown at half that rate—1.76%. Even in the years since the bottom of the great recession in 2009, which should have been a time of fast catch-up...

Complex technical stuff indeed Pascal Blanqué and Amin Rajan complain about unconventional monetary policy, low or negative rates and Quantitative Easing, which they mostly blame on Greenspan and the excessive reliance on the lender of last resort (LOLR) function of the central banks (even though this precedes Greenspan). They say: The US example shows all too clearly that the longer such unconventional policy remains in place, the harder it is to exit. Most likely, ultra-low rates will...

Mainly because of their "expectation that Argentina will settle holdout creditor claims which will result in a lifting of court injunctions and clear the way for Argentina to access international capital markets." Fair enough, access to capital markets would lift the balance of payments constraint, even if the agreement is a complete surrender to the Vultures demands. But the most interesting argument for the improvement in the credit rating is that it results from "economic policy...

By William K. Black April 17, 2016     Bloomington, MN The old joke, that conveys a critical truth, is the poster that says “The daily floggings will continue until morale improves around here.”  The troika misses the irony in the poster, for it thinks that the answer to the eurozone nightmare problems caused by austerity is more austerity.  The latest example is three IMF stories that ran contemporaneously.  The IMF, again, lowered global growth forecasts.  Two, the IMF is calling for...

By Naked Keynes (Guest Blogger)The latest IMF World Economic Outlook (April 2016) projects stagnation in World Growth (3.1% and 3.2% in 2015 and 2016) both in advanced economies (4.0% and 4.1% in 2015 and 2016) and emerging market and developing economies (1.9% and 1.9% for 2015 and 2016). The prospects for 2017 are hardly any better with an estimate of 3.5% for global output and continuing stagnation of advanced economies. But things could get worse.The current outlook scenario depends on...

Guest post by Ari Andricopoulos It is difficult to read the history of inter-war Europe and the US without feeling a deep sense of foreboding about the future of the Eurozone. What is the Eurozone if not a new gold standard, lacking even the flexibility to readjust the peg? For the war reparations demanded at Versailles, or the war debts owed by France and the UK to the US, we see the huge debts owed by the South of Europe to the North, particularly Germany. The growth model of the...

On March 16th, George Osborne unveiled his shiny new Budget. Full of populist tax giveaways to help "hard working people", it was the sort of budget that we might expect from a Chancellor riding the crest of an economic recovery. UK plc is growing well, profits are rising and the Board can afford to increase the dividend.But this is not the current economic situation. Far from an economic recovery gathering pace, the latest figures from the OBR show that UK plc is slowing. In its March 2016...