Austerity is contagious: The case of France France is finding itself between a rock and a hard place. On the one hand, with 54% of companies reporting in the third quarter 2014 that they find activity constrained by a lack of customers, the main problem is clearly on the side of demand. On the other […]

While Mario Draghi has stolen the show with his speech at Jackson Hole, another speech by Haruhiko Kuroda, governor of the Bank of Japan, is actually even more interesting. Kuroda’s introductory remarks are short and simple and they concern the 15 years of deflation Japan has experienced since the mid-nineties. The key lesson is that a […]

Led by the IMF, the main body of mainstream economists is now aware of the danger that debt deflation is raising for several Euro Area member states. This awareness is surely a good thing. However, what is conspicuously absent in this discussion is the link with wages. It is as if ‘lowflation’ (as the IMF […]

Economists at DG ECFIN are starting to notice something we have pointed out already some time ago: Despite an enormous cut in wage costs, Greek exports have firmly stayed put in recessionary territory and hopes for an export-led recovery have proven to be illusive. Troubled by this failure of Greek exports to lift off, DG ECFIN […]

Probably one of the most popular slogans of the entire European Semester is the catchphrase that wages should be aligned with productivity. The reason for its popularity is that this phrase can be used with a lot of flexibility. On the one hand, the Commission can make use of it to discipline wages and undermine […]