It is tempting for journalists in particular to treat arguments against fiscal consolidation (austerity) during the depth of the recession as the same as arguments against fiscal consolidation now. Of course there are connections, but there are also important differences. Austerity during a recession Case against The case against austerity in the depth of the […]
Understanding The Austerity Obsession
It has often been argued, loosely following Keynes, that economists should be like doctors. Martin Wolf writes “The austerity obsession, even [sic] when borrowing costs are so low, is lunatic”. The IMF, the OECD and pretty much the whole of informed opinion agree. Yet those subject to this austerity obsession are in charge of levels of public investment in […]
How The Eurozone Can Be Reformed
The 50th anniversary issue of Intereconomics is out, and I have a contribution which summarises how I think the Eurozone could succeed without deeply problematic attempts at fiscal and political union. I look at three areas where change is required, and then rerun history to show how the Eurozone crisis could have been transformed into no more […]
Bernie Sanders, Jeremy Corbyn And The Financial Crisis
Shortly after the full extent of the financial crisis had become clear, I remember saying in a meeting that at least now the position of those who took an extreme neoliberal position (markets are always right, the state just gets in the way of progress) would no longer be taken seriously. I could not have […]
A Crisis Made In Germany
The headline in my latest article for The Independent may seem like a wild exaggeration. But if we are talking about a crisis that impacted on unemployment in the entire Eurozone (except Germany) rather than just the periphery, then I think it is reasonable. It was German policy makers that insisted that the Eurozone embark on general […]
Defining Austerity
In my recent talk in Dublin, I defined fiscal austerity in a way that is not generally applied, but which I think makes sense. The most common usage is simply an attempt to reduce the budget deficit by cutting spending or raising taxes. The problem with that, as I remember Nick Rowe complaining, is that it becomes identical […]
Was German Wage Undercutting Deliberate?
In what I described over a year ago as the untold story of the Eurozone crisis, Germany held nominal wage increases below the level of other core Eurozone countries, gradually gaining a large competitive advantage over them. This had a number of consequences, but perhaps the most important is that when the Great Recession hit, Germany was […]
Why Media Myths Must Be Challenged!
At first sight the research reported here is something that only political science researchers should worry about. In trying to explain election results, it is better to use ‘real time’ data rather than ‘revised, final or vintage’ data. But as the authors point out, it has wider implications. Voters do not seem to respond to how the […]
Ireland And Greece
Ireland is often regarded as a success story for Eurozone austerity, compared to the total failure of Greece. That can lead to nonsense like this: instead of whingeing, the Greeks should buckle under and get on with it as Ireland has done. An alternative narrative is to explain the different experience of the two economies by […]
The Non-independent ECB
Imagine that the Scottish National Party (SNP) had won the independence referendum. The SNP starts negotiating with the remaining UK (rUK) government over issues like how to split up national debt. On some issue the negotiations get bogged down. Rumours start circulating that this might mean that rUK will not form a monetary union with […]
Austerity Is An Integral Part Of The Greek Tragedy
Too many people, including many in the Troika, see the Greek struggle as just about transfers from one debtor nation to lots of creditor nations. That is why they perhaps saw the Greek referendum as an unhelpful move, as just inflaming nationalist sentiment. As Dani Rodrik puts it “What the Greeks call democracy comes across in many […]
The Ideologues Of The Eurozone
It was all going so well. True, Greek GDP did shrink by 25% over 4 years, unemployment rose to 25% and youth unemployment to 50%, but before Syriza’s election Greek GDP had actually stopped falling. Further austerity was planned so that Greece could start to pay interest on its enormous debts, together with various ‘reforms’ […]
