Social Europe articles on the economy

The discussion has so far followed easily predictable national patterns: Creditor countries do not object to deflation, because it increases the real value of their investment, whereas debtor countries’ repayment burdens would grow heavier. In a closed economy, to every credit there must a corresponding debt. But consider individual countries: some run a large foreign […]

Slow growth in the Eurozone has become endemic since the start of the sovereign debt crisis in 2010. This is made very clear in Figure 1, which contrasts the growth experience of the Eurozone with the non-Eurozone EU-member countries since the start of the financial crisis in 2007.  What is striking is that up to […]

It has been pretty clear since at least the spring of this year that the ECB was keen to see the euro weakening. At the time the euro stood near to $1.40. Policymakers in a number of euro area member states issued calls for a more competitive exchange rate, directing barely hidden criticisms in this […]

Is a shrinking population always a bad thing? Judging by the lamentations of some economists and policymakers in the advanced economies, where people are living longer and birth rates have fallen below replacement levels, one certainly might think so. In fact, the benefits of demographic stability – or even slight decline – outweigh any adverse […]

Two years have passed since Mario Draghi promised to do “whatever it takes” to save the euro. The bond markets have calmed down but the crisis of the euro zone has not yet abated. Isolated pieces of positive information do not automatically imply a sustained recovery let alone justify triumphalism. While improving marginally, the rate of unemployment […]

In recent weeks, the managers, employees, and customers of a New England chain of supermarkets called “Market Basket” have joined together to oppose the board of director’s decision earlier in the year to oust the chain’s popular chief executive, Arthur T. Demoulas. Their demonstrations and boycotts have emptied most of the chain’s seventy stores. What was […]

Macroeconomic forecasts produced with macroeconomic models tend to be little better than intelligent guesswork. That is not an opinion – it is a fact. It is a fact because for decades many reputable and long standing model based forecasters have looked at their past errors, and that is what they find. It is also a […]

One of the arguments frequently made against the euro is that the Eurozone represents a ‘non-optimal’ currency area. This derives from the notion that the variations between regions within the Eurozone are simply too large for them to share a single currency without encountering problems. Waltraud Schelkle assesses this argument by comparing the experience of the Eurozone […]

Ten years ago, the world emerged from the dot-com bust and started to look more soberly at the Internet’s potential. While speculative greed and fear of missing out might have overplayed the short-term outlook, the Internet’s immense longer-term prospects were never in doubt. I, and other optimistic economists, assumed that free information and communication would […]

Poor countries export raw materials such as cocoa, iron ore, and raw diamonds. Rich countries export – often to those same poor countries – more complex products such as chocolate, cars, and jewels. If poor countries want to get rich, they should stop exporting their resources in raw form and concentrate on adding value to […]

“You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers,” President Obama said Thursday. He was referring to American corporations now busily acquiring foreign companies in order to become non-American, thereby reducing their U.S. tax bill. But the President might as well have been talking about all […]

The European economy is still in crisis. Real incomes in the Euro area are below the level of 2008 and unemployment is in the double digits in the southern European countries. While the crisis has originated in the USA, it is Europe that has fared worse. The European economic policy regime and European institutions, far […]