Qureshi, Zia, (2015), “Growing Out of Inequality”, Project Syndicate, 22 September Income inequality has been increasing in most major economies – and in many of them, it has been increasing significantly. This is a cause for growing concern, and rightly so: inequality not only can undermine an economy’s long-term growth prospects; it can restrain growth in the short term by depressing aggregate demand. Relevant Posts Münch, Richard, (2015), ” The Global Division …Read More

Mauro, Paolo, Zilinsky, Jan, (2015), “Fiscal tightening and economic growth – exploring cross-country correlations”, Voxeu, 18 September The public narrative on austerity is shaped by simple scatter plots purporting to portray the large negative impact of fiscal ‘austerity’ on economic growth. This column argues that, while recognising concerns about causality, economists should systematically explore correlations and multiple regressions, and test their robustness. The results reveal a mixed picture, lending partial support to the …Read More

Leron, Nicolas, Aglietta, Michel, (2015), “The Eurozone: Looking For The Sovereign”, Social Europe Journal, 11 September The Eurozone – because it remains an incomplete construct – has reached a critical point where its very existence is at stake. The Greek crisis and its never-ending drama, with the July 5 referendum, the “Grexit” strategy of some member states, the July 13 in extremis agreement and the vote in favour of a third aid …Read More

Economist, (2015), “Why the Fed targets 2% inflation”, The Economist explains, 13 September ON SEPTEMBER 17th the Federal Reserve will conclude a two-day, rate-setting meeting at which it just might raise its benchmark interest rate for the first time in more than nine years. Arguing in favour of a hike is the low unemployment rate, which fell to 5.1% in August. Arguing against it is the rate of inflation which, …Read More

Rodrik, Dani, (2015), “Economists vs. Economics”, Project Syndicate, 10 September Ever since the late nineteenth century, when economics, increasingly embracing mathematics and statistics, developed scientific pretensions, its practitioners have been accused of a variety of sins. The charges – including hubris, neglect of social goals beyond incomes, excessive attention to formal techniques, and failure to predict major economic developments such as financial crises – have usually come from outsiders, or …Read More

Cohen-Setton, Jeremie, (2015), “The triumph of backward-looking economics”, Bruegel publications, 7 September What’s at stake: At a time when monetary policy makers have a hard time generating inflation despite credible monetary regime changes (e.g. Japan), it is tempting to argue that there is simply substantial inertia in inflation. In this modern version of the old debate about the relative merit between rational and adaptive expectations, the reinterpretation of Reagan-Volker era …Read More

Rieth, Malte, Fratzscher, Marcel, (2015), “Bank bailouts, monetary policy, and credit default risks in the Eurozone”, Voxeu, 6 September In a response the Crisis, the ECB provided liquidity to banks on a massive scale and intervened in sovereign debt markets. This column argues that bank bailout policies and non-standard monetary policies by the ECB had a significant impact on default risks of sovereigns and banks in the Eurozone. The results, however, show that neither …Read More

Dawson, Mark, (2015), “The Eurozone crisis has deeply eroded the EU’s accountability structures”, LSE blog, 7 September Greece’s confrontation with the Eurozone seems to follow a familiar pattern. We start with a realisation, often confirmed by leaked IMF reports, that the latest round of financial assistance is not working. First the blame game: for creditor countries and their commentariat supporters, it is because reforms have not been properly implemented; for the …Read More