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Euro Deflation And How To Interpret It

Weeks, John, (2015). “Euro Deflation And How To Interpret It”, Social Europe Journal, 12 October If you read Larry Summers in the Financial Times, you know that recent data confirm falling prices in the euro zone.  Summers argues that the deflation indicates global stagnation, though we find disagreement on the appropriate interpretation. For some it is no more than the transitory effect of falling petroleum prices. Relevant Posts Muellbauer, J. …Read More

The Crisis Europe Needs

Eichengreen, Barry, (2015), “The Crisis Europe Needs”, Social Europe Journal, 15 October It’s hard to be optimistic about Europe. Last summer, a political cage match between Germany and Greece threatened to tear the European Union apart. In country after country, extremist political parties are gaining ground. And Russian President Vladimir Putin’s incursion into Ukraine, in the EU’s backyard, has turned the common European foreign and security policy into a punch …Read More

Weak States, Poor Countries

Deaton, Angus, (2015), “Weak States, Poor Countries”, Social Europe Journal, 13 October In Scotland, I was brought up to think of policemen as allies and to ask one for help when I needed it. Imagine my surprise when, as a 19-year-old on my first visit to the United States, I was met by a stream of obscenities from a New York City cop who was directing traffic in Times Square …Read More

The Mirage Of Structural Reform

Rodrik, Dani, (2015), “The Mirage Of Structural Reform”, Social Europe Journal, 12 October Every economic program imposed on Greece by its creditors since the financial crisis struck in 2009 has been held together by a central conceit: that structural reforms, conceived boldly and implemented without slippage, would bring about rapid economic recovery. The European Commission, the European Central Bank, and the International Monetary Fund anticipated that fiscal austerity would be …Read More

Cereals, appropriability, and hierarchy

Mayshar, Joram, Moav, Omer, Neeman, Zvika, Pascali, Luigi, (2015), “Cereals, appropriability, and hierarchy”, Voxeu, 11 September Conventional theory suggests that hierarchy and state institutions emerged due to increased productivity following the Neolithic transition to farming. This column argues that these social developments were a result of an increase in the ability of both robbers and the emergent elite to appropriate crops. Hierarchy and state institutions developed, therefore, only in regions where appropriable cereal crops had sufficient productivity advantage …Read More

The German Minimum Wage Is Not A Job Killer

Janssen, Ronald, (2015), “The German Minimum Wage Is Not A Job Killer”, Social Europe Journal, 9 September Mainstream economists excel in scaremongering about the dismal effects any policy that tries to correct market forces may have on economic performance. By arguing that such a policy will destroy jobs, things are even turned upside down. Because of the presumed job losses, social policy suddenly becomes anything but social while liberal economic policy …Read More

Labor Day 2028

Reich, Robert, (2015), “Labor Day 2028”, Social Europe Journal, 3 September Without such a mechanism, most of us are condemned to work ever harder in order to compensate for lost earnings due to the labor-replacing technologies. Such technologies are even replacing knowledge workers – a big reason why college degrees no longer deliver steadily higher wages and larger shares of the economic pie. Since 2000, the vast majority of college graduates have …Read More

Does Capitalism Cause Poverty?

Hausmann, Ricardo, (2015), “Does Capitalism Cause Poverty?”, Social Europe Journal, 31 Αυgust Capitalism gets blamed for many things nowadays: poverty, inequality, unemployment, even global warming. As Pope Francis said in a recent speech in Bolivia: “This system is by now intolerable: farm workers find it intolerable, laborers find it intolerable, communities find it intolerable, peoples find it intolerable. The earth itself – our sister, Mother Earth, as Saint Francis would say – …Read More

Wealth and income distribution: New theories needed for a new era

Kanbur, Ravi, Stiglitz, Joseph, (2015), “Wealth and income distribution: New theories needed for a new era”, Voxeu, 18 Αυgust Growth theories traditionally focus on the Kaldor-Kuznets stylised facts. Ravi Kanbur and Nobelist Joe Stiglitz argue that these no longer hold; new theory is needed. The new models need to drop competitive marginal productivity theories of factor returns in favour of rent-generating mechanism and wealth inequality by focusing on the ‘rules of the game.’ …Read More

The Downside of Labor Mobility

Krugman, Paul, (2015), “The Downside of Labor Mobility”, NY Times blog, 14 Αυgust The theory of optimum currency areas is one of those old-fashioned pieces of macroeconomics — like IS-LM, the concept of the liquidity trap, and the theory of secular stagnation — that has turned out to be extremely relevant and useful to the world since 2008. So this is a version of Mark Thoma’s dictum that new economic …Read More