Did This Straw Break the Finance Sector’s Back? T. Sabri Oncu

I will define the straw and start with quoting from my July 2017 H T Parekh Finance Column titled “Debts That  Cannot Be Paid Will Not Be” (Öncü 2017). With my June 2015 H T Parekh Finance Column article titled “When Will the Next Financial Crisis Start?” [Öncü 2015a] I initiated an investigation of the possibility of a new phase in the ongoing global financial crisis (GFC) that started in the summer of 2007. [This article was retitled on the Policy Research in Macroeconomics website as “What Straw Will Break the Finance Sector’s Back?” when it was republished three days…

Making Merry on Bitcoin C.P. Chandrasekhar

Bitcoin has left the world of finance gasping. Though the total market value of all of that cryptocurrency in circulation is only a fraction of the value of the world’s financial assets, the rapid rise in the value of the currency has made it the most wanted of those assets. On January 1, 2017, the currency was trading at between $972 to $990 a unit. By December 7 that range had risen to $14,063 to $17,363. According to a calculation by Reuters, an investment of $1000 in bitcoins at the beginning of 2013 would be worth around $1.2 million now.…

Interest Rate Conundrum C.P. Chandrasekhar and Jayati Ghosh

With interest rates and bond yields turning negative in many developed countries, the efficacy of monetary policy as a counter cyclical instrument is in question. Interest_Rate_Conundrum  (Download the full text in PDF format) (This article was originally published in the Business Line print edition dated March 14, 2016.)

On the Economics Nobel Prize Jayati Ghosh

The Economics Prize is not strictly a “real” Nobel Prize: it was not created by the Nobel Foundation but by the Central Bank of Sweden in the late 1960s. And economics is not a “real” science. It is not even that clear whether the mainstream economics discipline as it exists today contributes much to human knowledge, or well-being (as the literature and peace prizes are supposed to celebrate). So how come economics get this privilege of a Nobel Prize unlike other social sciences? The human rights activist Peter Nobel felt that his grand-uncle Alfred Nobel would not have approved of…

Trade and Development – A forgotten issue? Gabriele Koehler

Post-2015 discussions are in full swing – debating what a new, sustainable development agenda ought to look like.  The Future we want – outcome document of the Rio Summit held earlier this year, noted that “sustained economic growth for reduction of poverty, inequality and vulnerability will require strengthened partnerships among governments, the private sector and civil society to make sure that international trade, national and foreign direct investments contribute to productive employment creation, economic security and investments in health, education, rural development, water and sanitation while safeguarding human rights and empowering women.” It speaks of a fair and stable global…

The G20: Overestimated and underperforming Drawing a balance of the G20 achievements four years after the crash Peter Wahl

This paper analyses the performance of the G20 since the Pittsburgh Summit. It is argued that financial reforms which were not deep enough, came too slow and too late and the geo-political reconfiguration of the international system are some of the reasons explaining the poor performance of the G20. It also discusses the issue whether the mandate of the G20 should be restricted to economic issues or be expanded for instance to environment and development. g20 (Download the full text in PDF format)

From the Failure of Europe to Possible Growth in the Real Economy Sergio Cesaratto and Lanfranco Turci

The initial enthusiasm of the financial markets over the last European summit was short lived as the new ''kick down the can, grand plan'' to solve the crisis was agreed upon. To bolster the market, the remnants of the famous EFSF 440 billions Euros - which, never forget, was also provided by the periphery countries it was supposed ''to save'' - should be used to leverage new instruments aimed at forming a potential of, say, 1 trillion euros. The idea is to insure 20% of the newly issued sovereign debt of risk countries and to create special purpose vehicles (SPVs)…

Sinking Ship Jayati Ghosh

Talk about re-arranging deck chairs on the Titanic. The economic news from Europe is alarming, no doubt, but it is also ludicrous. At a time of the most severe economic and financial crisis that has affected the region since the early 1930s, politicians from the major countries involved rush around to meeting where they agree, once again, to disagree, and to put forward more of the same policies that are manifestly failing. There is now almost no doubt that the collapse is imminent, of the economic and monetary union that took over half a century to evolve. At least, the…

Fundamental Flaws in the European Project George Irvin and Alex Izurieta

The euro was informed by a neo-liberal view of leaving policy entirely to market forces. In consequence, by way of its specific design, it removed three essential policy instruments from the domain of national policymaking - exchange rate management, monetary policy and fiscal policy- and it intrinsically weakened labour and welfare policy. These are the fundamental flaws in the design of the European project. Fundamental_Flaws    (Download the full text in PDF format) (This article was originally published in Economic and Political Weekly, VOL 46 No. 32 August 06 - August 12, 2011.)

New Issue Newsletter on EU Financial Reform

The financial costs of resolving the financial crisis that erupted in September 2008 are now taking a heavy toll on the economy, democracy and society of Greece, Ireland, Portugal and many other economies. It is time that decision makers and the financial sector change their old ways of acting and thinking before the crisis gets completely out of hand. The new issue of the newsletter EU Financial Reform, edited by SOMO and WEED, is online. You can view and download it as PDF-document at the WEED homepage: eu_financial (Download the full text in PDF format)