Portugal voted for the wrong government – that’s now been ‘corrected’

October 24, 2015

  One of the many faults of the single currency system is the way that is has systematically undermined democracy in the eurozone. Economic policy, and the decisions that effect hundreds of millions of people, are taken in secret by unelected technocrats, and government budgetary policies (literally the bread and butter of politics) are constrained […]

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Spain: a Eurozone success story?

October 21, 2015

Spain is, supposedly, one of the success stories of the eurozone. Growth has resumed after the financial crisis and the current account is in surplus. According to the Rajoy government in Madrid Spain’s economy is back on track, and that will be the line that it pushes until the crucial Spanish general election in December. […]

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Some recent items of interest

October 19, 2015

  According to Eurostat, the statistical office of the European Union, the risk of poverty or social exclusion affected 1 in 4 persons in the EU in 2014 In 2014, 122 million people, or 24.4% of the population, in the European Union (EU) were at risk of poverty or social exclusion. This means that they […]

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Who makes economic policy in the eurozone?

October 16, 2015

  Ask yourself a simple question: who makes the economic policy of the eurozone? In a functional liberal democracy the answer to the question ‘who makes economic policy’ would be fairly straightforward; there would a democratically elected parliament of some sort, plus maybe a democratically elected president, and a government composed of mostly elected politicians. […]

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The crisis of European Social Democracy

October 13, 2015

  Electorally, West European social democrats are at their lowest point for forty years. The graph below shows an index based on the simple and population-weighed average vote share for social democratic parties in the old EU member states (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and […]

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Bank bailouts: Why the US made a profit and the UK won’t

October 10, 2015

At the end of last year the US government announced that it had made a profit from its bank bailouts. The UK, on the other hand, probably won’t. So what did the Americans do right and the UK do wrong?

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Russia’s Syrian gamble

October 7, 2015

Initially the boldness of the Russian intervention in Syria seemed to make Washington look weak and confused. However the Russians, beset by severe economic problems and already bogged down in a proxy war in the Ukraine, have taken a great risk by intervening in Syria. Going into Syria was relatively easy, getting out may be […]

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Some recent items of interest

October 4, 2015

Two of the seven economists that have agreed to become economic advisers to Jeremy Corbyn have published an article and a Q&A session offering some initial thoughts about some of the key issues of economic policy in the UK. Mariana Mazzucato, who is the Professor of the Economics of Innovation at the Science Policy Research […]

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Escaping the deficit narrative

October 1, 2015

Although the new leadership that was on display at the Labour Conference had some interesting things to say the message on economic policy was not just confused (which is hardly surprising given the unexpected nature of the left’s triumph in the leadership election) but oddly lacking in radicalism. Rejecting ‘deficit denial’ is a clever sound […]

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Why things don’t feel better

October 1, 2015

According to the official statistics UK per capita Gross Domestic Product (GDP) is now finally back above its pre-crisis level. Has the damage of the Great Recession of 2007-08 been undone and are the people of the UK now beginning to see their incomes finally grow above their pre-crisis levels? Not quite.

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Three long months looming in Spain

September 21, 2015

On September 27 regional elections will take place in Catalonia and if the pro-independence parties win a majority of seats in Catalonia’s parliament, they will unilaterally declare independence from Spain. Nearly three months later on 20 December 2015 there will a Spanish general election and recent opinion polls suggest that no single party will gain […]

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Two videos and an audio presentation

September 19, 2015

Economist Michael Hudson explains how finance became capitalism’s driving force and why an increasing amount of American life is being dedicated to sustaining unsustainable debt values, then gives a radical history lesson in debt economics – from ancient Sumer to the University of Chicago – that suggests the only way to end a debt crisis […]

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Cheap oil and the political economy of Russia

September 17, 2015

The steep drop in the price of oil is obviously having a severe impact on the Russian economy. Russia is correctly seen as being heavily dependent on oil and gas revenues but merely categorising Russia as a petro-rentier nation misses some of the important nuances of its political economy. The way in which the inflated […]

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Some recent items of interest

September 9, 2015

Troika ‘vetoed’ a 2010 proposal from the Irish government to impose bondholder haircuts. From the irish Times 9/9/15 The EU-IMF Troika veteod a proposal to impose haircuts on about €4 billion worth of senior unguaranteed bondholders in late 2010, a special adviser to the former minister for finance Brian Lenihan told the Oireachtas Banking Inquiry […]

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Vulture Funds

September 8, 2015

When an individual or a company goes bust there are well established legal frameworks and rules that ensure that it happens in an orderly, predictability and relatively fair way. In the case of an individual non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). […]

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Debating “Corbynomics”

September 7, 2015

The proposals from Jeremy Corbyn have definitively opened up and extended the debate on economic policy but how practical are they? The economic policies of Jeremy Corbyn have been described by 41 economists in one letter as being mainstream economics, following which a different 55 economists wrote to the FT claiming those policies would be […]

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Varoufakis talks about Europe and the third Greek program

September 7, 2015

Here are two interesting videos featuring Yannis Varoufakis the ex-Finance Minister of Greece. There is also a very interesting interview with Varoufakis at Squawk Box Europe. In the first video published on 28 Aug 2015 Varoufakis is questioned by a German interviewer about the details of what when on during the months of tense negotiations […]

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Tense times in Beijing

August 24, 2015

These are difficult times for the ruling elites in Beijing. China is at the beginning of a profound restructuring of its economy and is being forced to let go of the high growth model that has sustained it for the last couple of decades (see this article). This restructuring involves ending dependence on investments and […]

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An update on Greek debt and the rejected Greek reform proposals

August 23, 2015

Here is the updated Greek debt repayment scheduled. Note that it stretches until 2059 and involves Greece making multi-billion Euro repayment every year until then. This means that Greece will have to be able to generate a sizeable surplus on its state budget (collect more taxes than it spends), amounting to several €billion, every year […]

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Global debt and the great rebalancing

August 20, 2015

After the 2008 financial crisis and the longest and deepest global recession since World War II, it was widely expected that the world’s economies would deleverage and that global levels debt would be slowly reduced as usually happens in the aftermath of a financial crisis. It has not happened. Instead, debt continue to grow in […]

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