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Austerity and Ideology
Wolfgang Munchau has another interesting editorial on austerity, in yesterday’s Financial Times. He argues that the US may become the next paying member of the austerity club, thus making the...
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One Austerity (Should Not) Fit All
The run up to the Italian elections in February is a welcome occasion to come back to the issue of austerity. The debate in Italy was fired by the widely discussed Wolfgang Munchau editorial, blaming...
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End of The Tunnel?
There are signs of optimism around. Cautiously, policy makers and commentators start discussing the shape (and the fragility) of the future recovery. Martin Wolf on the Financial Times already...
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Bringing Krugman to Europe
Well, not him, actually (I wish I could); I need to content myself with his latest post on austerity. Krugman argues that austerity is happening (it is trivial, but he needs repeating over and over...
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It’s the Denominator, Stupid!
This weekend’s news was the downgrade of the UK by Moody’s. Chancellor Osborne took this as a sign that austerity should be strengthened even more, probably because he had little choice (never put all...
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Wishful Thinking
Yesterday I published a note on OFCE le blog (in French), analyzing one possible outcome of the recent Italian elections: A center-left minority government, with external support of the Cinque Stelle...
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Leaks in the Dam?
Interesting things happened this morning. I assisted to one of the presentations of the OECD interim assessment. There is nothing very new in the assessment, that concerning the eurozone, can be...
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The Commission on Portugal: Is This for Real?
A quick note on Portugal. Let’s start from three facts: Austerity did not work. Portugal is in a recessionary cycle. The economy will shrink by 2.3 per cent this year, more than twice as much as the...
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Cockroach Ideas and Weak Arguments
Helene Mees in a Project Syndicate Comment weighs into the dispute between Paul Krugman and the Commission officials, siding with Rehn and his people. Mees’ criticism of Krugman is two-sided. First,...
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Countercyclical no More
Browsing national accounts may be an inexhaustible source of insight on the current debate about austerity. Take this figure, which shows the evolution of real GDP and of its components for the US and...
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Raepetita Iuvant
Yesterday Eurostat published growth flash estimates for a number of EU countries. As expected, they do not look good. In 2013 Q1 the eurozone has lost 1 per cent of its GDP with respect to the first...
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Living in Terror of Dead Economists
Kenneth Rogoff has a piece on the Project Syndicate that is revealing of today’s intellectual climate. What does he say? The eurozone problems are structural, and stem from a monetary and economic...
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Supporting Aggregate Demand in Fiscally Constrained Economies
In the past weeks I have argued at length that the eurozone is in recession because of a strong contraction of aggregate demand; and that in spite of this fact the overall fiscal stance is...
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Dani for President
Dani Rodrik has an excellent piece on Project Syndicate. I strongly advise reading and sharing it. Rodrik points out that structural reforms (if well designed, I’d add) tend to destroy jobs in low...
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Wait Before Toasting
Just a quick note on yesterday’s announcement by the Commission that virtuous countries will be able, in 2013 and 2014, to run deficits and to implement public investment projects. Faced with an...
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The Italian Job
A follow-up of the post on public investment. I had said that the resources available based on my calculation were to be seen as an upper bound, being among other things based on the Spring forecasts...
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Surrogates of Fiscal Federalism
We have been distracted by many events in the past few days, and an important document by the Commission did not have the attention it deserves. In a Communication on the social dimension of the...
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Mario Draghi is a Lonely Man
I just read an interesting piece by Nicolò Cavalli on the ECB and deflationary risks in the eurozone. The piece is in Italian, but here is a quick summary: Persisting high unemployment, coupled with...
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Fiscal Expansion or What?
The newly born Italian magazine Pagina99 published a piece I wrote on rebalancing in Europe after the German elections. Here is an English version. The preliminary estimates for 2013 released by the...
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Wrong Debates
Paul Krugman has a short post on the Eurozone, today (I’d like him to write more about us; he has been too America-centered lately), pointing out that the myth of fiscal profligacy is, well, just a...
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