Many international economic institutions share the idea that collective bargaining should take place at the level of individual companies. For example, the OECD, as far back as its 1994 Jobs Strategy, pushed for more firm level bargaining by insisting that the instrument of administrative extension of collective agreements to all firms within a given sector […]
OECD Meets Piketty: An Alternative Economic Narrative
Today’s profits are not tomorrow’s investments A picture can say more than a thousand words. This is certainly true for the set of graphs (see below) that the OECD published in its latest Economic Outlook and that show the rate of return on fixed assets – a proxy measure for the rate of profitability on […]
How The OECD Wants To Make Globalisation Work For All
Worried by the populist backlash against globalisation, a big crowd of ministers, politicians and economists participated last June in the annual OECD week in Paris to discuss how to make globalisation work for everyone. While a multitude of panels and presentations stressed the benefits of economic openness and trade, the papers and publications which the […]
Has The OECD Joined The Campaign For Higher Wages?
Weak wages produce a weak recovery Trade unions tend to see wages not as a factor of competitiveness but as an engine that drives demand, growth and jobs. The Economic Outlook published this week by the OECD supports this view as it explains the lacklustre economic that is going on via the stagnation of wage […]
The OECD And Job Protection: New Findings But Old Policy Recipes On ‘Your Wage Or Your Job’
One of the key findings from the 2016 Employment Outlook just released by the OECD is that easier firing does not create jobs. Moreover, the OECD also finds that loosening job protection in the middle of an economic downturn results in immediate and substantial job losses. However, instead of cautioning policy makers against the danger […]
Central Banks Warm To Collective Bargaining
Something peculiar is happening. Up until recently, many central bankers were looking at robust collective bargaining and wage formation systems as a possible source for inflationary wage developments. Indeed, central banks, and the ECB in particular, have on numerous occasions called for more flexible and decentralised (read: weakened) wage bargaining systems so as to remove […]
Break The Vicious Circle Of Falling Prices And Wages
The IMF has recently released its latest World Economic Outlook (WEO) Update pointing to persistently weak growth and another downward revision of its projected growth rates for 2016 and 2017 by 0.2 percentage points in each year. Despite this, the IMF’s growth trajectory still sees the world economy recovering slightly from the weakness it experienced […]
How Germany Gains From The Euro While Others Pay
The ‘non-paper’ which Wolfgang Schäuble presented to his fellow finance ministers at a recent ECOFIN council in Luxemburg (leaked by the Handelsblatt newspaper) represents something of a paradox. One of its main ideas is that the euro area lacks a procedure that could declare member states bankrupt when having lost access to financial markets. This […]
The German Minimum Wage Is Not A Job Killer
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 is […]
Democracy And Monetary Union: How Not To Do It
With the showdown between the “institutions” and Greece catching the headlines of policy discussions across Europe, the publication of the report on completing Economic and Monetary Union (EMU) has almost been lost from sight. The report, signed this time by five presidents including the President of the European Parliament, raises several interesting issues ranging from […]
Labour Market Deregulation and Productivity: IMF Finds No Link
New research by IMF staff has found there is no evidence that reforms that deregulate labour markets have any positive impact on increasing the economy’s growth potential. As labour market deregulation has been a key ingredient in the IMF and troika’s financial bail-out programmes in several European member states, this raises serious questions about the […]
European Economic Governance And Flawed Analysis
Getting Stupid Capital Flows Off The Hook The analytical note on the next steps for better economic governance that was published mid- February during the informal European Council reopens the discussion on how to obtain a strict coordination of national economic policy making in the Euro Area. Or, to put it more bluntly, how to […]
