Can government deficits be financed directly by central banks, as modern monetary theory suggests? The question should not be if but how much.
For a decade there has been cross-party support in Germany for the balanced-budget rule. But in the first of a series of Social Europe columns on German economic debates, Peter Bofinger explains why the social democrats should abandon the ‘black zero’. If our children and grandchildren look back on the present day in 30 years, […]
The Eurozone (EZ) ‘consensus narrative’ argues the Crisis should not be thought of as a government debt crisis in its origin. Instead it regards large intra-EZ capital flows that emerged in the decade before the Crisis as the real culprit. This column argues that while the narrative is correct, it is also incomplete. With its […]
The Euro area is suffering from insufficient macroeconomic stabilisation At the end of 2009 the unemployment rates of the Euro area and the United States had reached a level of 10%. Since then, unemployment in the US has fallen to 7.3% while in the Euro area it has climbed to 12.0%. This is not surprising […]