In the immediate aftermath of the financial crisis, most European governments allowed the automatic stabilisers to kick in and implemented some mild discretionary measures, despite the strictures of the Stability and Growth Pact (SGP). But it was not long before the siren calls for “fiscal consolidation” arose…
Read more...The global crisis changed the face of monetary policy. This column, written by the IMF’s chief economist, reviews the main changes. It draws on contributions to a recent IMF conference on the topic.
Read more...While Pete Peterson and Bob Rubin have couched their campaign against Social Security and Medicare in the moral vestments of “fiscal responsibility”, they gloss over the macroeconomic financial reality of government and the requirement for deficit spending to maintain growth of the national and world economies. The moral fervor that they apply is inapplicable to government programs: while it may seem real to them or the gullible politicians they influence, the moral outrage they hope to play on is based on false and inhumane premises.
Read more...I have to confess I find stereotyping annoying, and in almost all cases, it’s a poor substitute for more careful analysis and characterization. Yet it is marvelously effective in politics, as Karl Rove proved.
Read more...Over a week ago Lawrence Summers stunned the world of economics by the remarks he made at the IMF‘s 14th Annual Research Conference on the Economic Crisis, where he pronounced the dreaded “SS” words: “secular stagnation”.
Read more...France’s government is struggling to stay relevant….and Groupe BPCE may have provided an answer by telling Germany to pay up or exit the Eurozone.
Read more...A conversation with Phil Pilkington on Europe’s disgraceful triumphalism regarding Ireland’s ‘exit’ from its ‘bailout’
Read more...A report issued by McKinsey Global Institute last week on the real world impact of QE warrants more scrutiny than it has gotten so far.
Read more...We have now passed the event horizon into a world run by Dr. Pangloss. In a Sunday afternoon post, Paul Krugman enthusiastically endorses an IMF presentation by Larry Summers which depicts asset bubbles as necessary and desirable. And that means they both agree they should not only continue, they should be encouraged.
Read more...Yves here. I know I should write about Janet Yellen’s confirmation hearing, but I can’t stand to do it. Plus I am confident you’ll enjoy this piece more.
Read more...ves here. Pettis highlights the difficulties of restructuring the Chinese economy to feature more small business lending and consumption and calls them “political.” I’m not sure I agree fully.
Read more...A new era has dawned: there is now a consensus that this is a stock market bubble. We’re back where we were during the last bubble, or the one before it, though the jury is still out if this is February 2000 or October 1999 or sometime in 2007.
Read more...We are certain to hear more and more appraisals of Bernake’s tenure as Fed chairman as he approaches the end of his term. But will they use good benchmarks? We suggest measuring his performance against his claims for the Fed’s objectives and what he said the central bank could accomplish. Not surprisingly, we find that he came up short.
Read more...For a while now I have been arguing that Europe’s policies for reducing the public debts of fiscally stressed member-states can be described as a Ponzi austerity scheme. In this post I attempt precisely to define ‘Ponzi austerity’.
Read more...Yves here. As Hugh said via e-mail:
Read more...The report is actually two reports fundamentally at odds with each other.
It’s like taking a hammer to a tomato. One report says the tomato got smashed. The other report says the tomato got bigger. Which are you going to believe?
