Social Europe articles on the economy

Since its most recent low of $1.20, reached in the heat of the summer of 2012, the euro has appreciated by 15 percent against the US dollar and by more than 10 percent in inflation-adjusted terms against a broad basket of currencies representative of the euro area’s main trading partners. Amounting to a significant loss […]

“What a commentary on the state of twentieth-century capitalism,” mused “motivational speaker” Jordan Belfort as he looked back on his life of fraud, sex, and drugs. As head of the brokerage firm Stratton Oakmont, he fleeced investors of hundreds of millions of dollars in the early 1990’s. I saw Martin Scorsese’s film The Wolf of Wall […]

Now that the pace of the US Federal Reserve’s “tapering” of its asset-purchase program has been debated to death, attention will increasingly turn to prospects for interest-rate increases. But another question looms: How will central banks achieve a final “exit” from unconventional monetary policy and return balance sheets swollen by unconventional monetary policy to “normal” […]

I grew up in Texas where state and local judges are elected, not unusual in the United States. In most states minimum legal qualifications are required for a person to stand for judge. Not so in Texas, where we had the saying: in some places you need a law degree to run for judge, but […]

It’s a well-known fact that since the financial crisis the Fed and the ECB have pursued rather different monetary policies: the Fed has engaged in large amounts of quantitative easing (QE) –purchases of mortgage-backed securities and other securities such as government bonds –, while the ECB has relied on more conventional monetary policies (the lowering […]

It is quite interesting to see how popular myths can live on in the public’s mind and continue to cause harm and irritation even when the facts speak to totally different language. How can education fail so badly? The particular example I have in mind here is Germans’ supposed exceptionalism in matters of inflation hyper-sensitivity. […]

After taking a short breather in late January-early February, the markets now seem to be back in ‘happy mode’. Whether the news on the economic recovery is good or bad doesn’t really matter. The current convention is that growth acceleration is under way. That emerging markets had become key drivers of global growth was yesterday’s […]

If you ever wonder what’s fueling America’s staggering inequality, ponder Facebook’s acquisition of the mobile messaging company WhatsApp . According to news reports yesterday, Facebook has agreed to buy WhatsApp for $19 billion. That’s the highest price paid for a startup in history. It’s $3 billion more than Facebook raised when it was first listed, and more […]

Emerging markets are back in the spotlight. Investors and banks are suddenly unwilling to finance current-account deficits with short-term debt. South Africa, for example, has had to increase interest rates, despite slow economic growth, to attract the funding it needs. Turkey’s rate increase has been dramatic. For these and other emerging countries, 2014 may prove to […]

The US Federal Reserve is being widely blamed for the recent eruption of volatility in emerging markets. But is the Fed just a convenient whipping boy? It is easier to blame the Fed for today’s global economic problems than it is to blame China’s secular slowdown, which reflects Chinese officials’ laudable efforts to rebalance their […]

Soon after the global financial crisis erupted in 2008, I warned that unless the right policies were adopted, Japanese-style malaise – slow growth and near-stagnant incomes for years to come – could set in. While leaders on both sides of the Atlantic claimed that they had learned the lessons of Japan, they promptly proceeded to […]

The Euro area is suffering from insufficient macroeconomic stabilisation At the end of 2009 the unemployment rates of the Euro area and the United States had reached a level of 10%. Since then, unemployment in the US has fallen to 7.3% while in the Euro area it has climbed to 12.0%. This is not surprising […]