I realise I have not written much about Greece since the open letter to Angela Merkel that Thomas Piketty, Jeffrey Sachs, Dani Rodrik, Heiner Flassbeck and I wrote in July 2015 (see here and here). Nothing has changed to alter the views I expressed then. The excess borrowing, some of which they kept secret, of Greek governments before […]
The Biggest Economic Policy Mistake Of The Last Decade Had Nothing To Do With Academic Economists
“The biggest policy mistake of the last decade” is the title of an article by Ryan Cooper, and the mistake is of course austerity (it is a very US focussed piece, so Brexit is not on the map). Cooper goes through all the academics who gave reasons why austerity was necessary and how their analysis later […]
Fiscal Policy Remains In The Stone Age
Or maybe the middle ages, but certainly not anything more recent than the 1920s. Keynes advocated using fiscal expansion in what he called a liquidity trap in the 1930s. Nowadays we use a different terminology, and talk about the need for fiscal expansion when nominal interest rates are stuck at the Zero Lower Bound or […]
May’s Perpetual Brexit And Labour’s Forsaken Base
Two pieces of recent Brexit news are that a majority of the ‘war cabinet’ outvoted May on the choice between two unworkable, and therefore unacceptable to the EU, proposals to keep the Irish border infrastructure free, and Labour plans not to support a Lords amendment to keep the UK in the Single Market (SM). I […]
The Complete Failure Of The Brexit Project
The Brexit project is already a complete failure. That statement may seem odd, as we are less than one year away from leaving the EU. But what happens in March 2019 if all goes to plan? We leave the EU, but remain in the Single Market (SM) and Customs Union (CU). It is not Brexit […]
A Road To Right Wing Authoritarian Government
This post is inspired by another, by Jan-Werner Müller. I have talked about Müller’s ideas on populism before. This particular post is a plea to focus less on the voters who elect populist politicians, and more on the politicians themselves. He writes: In 2010, Viktor Orbán did not campaign on a promise to draft a […]
The Three Mistakes Of Centrism
Paul Krugman quite rightly often complains about people he calls professional centrists, who always suggest there is a middle road between the ‘extreme’ views of Democrats or Republicans. He noted that such centrists always have to blame both sides, and would typically fail to note that although the Democrats have stayed pretty much in the […]
Academic Knowledge About Economic Policy Is Not Just Another Opinion
Does the financial crisis reveal that economists are at the leeches and mercury stage of their subject, and as a result policy makers and the public have every right to ignore what they say? Does the fact that economists working in finance failed to recognise the prospect of a systemic crisis, and that macroeconomists both […]
If We Treat Plutocracy As Democracy, Democracy Dies
The snake-oil salesmen There are many similarities between Brexit and Trump. They are both authoritarian movements, where authority either lies with a single individual or a single vote: the vote that binds them all. This authority expresses the movement’s identity. They are irrational movements, by which I mean that they cast aside expertise where that […]
Links Between Austerity And Immigration, And The Power Of Information
This discussion by Roger Scully about why people in the Welsh Valleys voted Leave is depressing although not surprising. In essence it is immigration, bolstered by local stories of Polish people coming into communities and reducing wages. I doubt if quoting econometric studies about how little immigration influences wages would make much difference to these attitudes (although […]
Why Has Brexit Led To Falling Real Wages?
This might seem easy. The depreciation immediately after Brexit, plus subsequent declines in the number of Euros you can buy with a £, are pushing up import prices which feed into consumer prices (with a lag) which reduce real wages. But real wages depend on nominal wages as well as prices. So why are nominal […]
Brexit And Democracy
A constant refrain from politicians and others is that we have to leave the EU because we have to respect democracy, where by democracy they mean that 52% voted to do so. Arguments that the vote was based on lies by the Leave side are met with dismissive remarks like both sides were the same, […]
