Draghi’s law of conditional safety
Understanding the Eurozone
The fundamental macroeconomic policy challenge faced by the Eurozone is how to have a risk free asset - which is essential to the functioning of a modern financial system - while sim...
How Europe works
This time it's Italy
I used to believe that the Eurozone was undemocratic. Now I'm not so sure. The simple view is that national electorates have been neutered. When Greece votes to reject austerity, its gover...
If you don’t like trade deficits – tax the rich?
Has the word ‘deficit’ done more damage than any other in economics? Deficits are bad, surpluses are good. In economics, nothing could be further from the truth. How can there be virtue, if every virtuous act r...
Rethinking Brexit, via Kilkenny & Oxford
Mark Blyth and I have been arguing that nationalism is a global virus, filling the vacuum created by the erosion of political identity under neo-liberalism. The Cold War era now appears, almost nostalgically, a...
Renzi’s referendum, Europe’s future
It seems apposite that Matteo Renzi's term as Italian Prime minister should end in this way. This referendum was a surreal distraction. Italy does not need faster political decision-making. Good decisions alway...
Where next? Monetary policy in a post policy-rate world
Three new bazookas
Recent shifts in policy direction by global central banks may prove to be profound. The Bank of Japan and the ECB appear to be conceding that further bond purchases and lower policy rates ar...
Fiscal subservience – a reply to Chris Sims
Chris Sims is a deeply thoughtful economist and his paper at the recent Jackson Hole conference has rightly received a lot of attention, notably from Gavyn Davies, in the FT, and Paul Krugman.
It is simultan...
Institutions matter
The monetary & fiscal distinction revisited
Monetary policy involves changes in the supply of base money and is carried out by central banks. Fiscal policy involves taxation, spending and transfers carried o...
Eight pitfalls to avoid in the helicopter money debate
Learn first, then teach
Professors Stephen Cecchetti and Kermit Schoenholtz are the latest to opine on the subject of helicopter money. It is worth quoting from their opening paragraphs, it frees me up to re...
Monetary policy: transparency or obfuscation?
We live in a era where monetary policy is more transparent than ever - if measured by press conferences, publication of minutes and individual policy-makers forecasts.
At the same time, the behaviour of cent...