Wickens, M. and Polito, V., (2013), “A fiscal perspective on EU sovereign credit ratings: Did the credit-rating agencies get them right?”, VoxEU, 30 October. A good credit rating has become a key fiscal objective, even if it requires austerity when unemployment is high. Recent experience has raised doubts about the sovereign ratings provided by the credit-rating agencies. This column suggests a new way to measure credit ratings based on a …Read More

Wren-Lewis, S., (2013), “The ‘Official’ Cost Of Austerity”, Social Europe Journal, 29 October. Well, not quite, but probably as close as we will ever get. In a new paper, Jan in‘t Veld uses the European Commission’s QUEST model to estimate the impact of fiscal consolidation in the Eurozone (EZ) from 2011 to 2013. The numbers in the table below include spillover effects from other EZ country fiscal consolidations, so they …Read More

Sinn, H.W., (2013), “In Praise of Debt Ceilings”, Project Syndicate, 17 October. The wrangling about raising the US government’s borrowing limit – now thankfully over, at least for a few months – underscores the hazards posed by excessive state indebtedness. Governments nowadays are essentially running gigantic redistribution machines that steer funds from taxpayers to transfer recipients and other beneficiaries of public expenditure. The latter permanently ask for more, while the …Read More

Wright, T., (2013), “The Periphery Six”, Project Syndicate, 14 October. Cyprus, Greece, Ireland, Italy, Portugal, and Spain share a problem. With massive debt, no control over monetary policy, and no leeway for fiscal stimulus, they appear headed for a lost decade of high unemployment and low GDP growth. Such a path would drain the political establishment of legitimacy and prevent a real recovery in Europe. With structural reforms having proved …Read More