A service of the

Forum

A New Economic Paradigm

The financial crisis of 2008-09 may have occurred a decade ago, but we are still dealing with the repercussions today, including a global populism wave. The crisis has also led to the demise of economists' unwavering belief in market efficiency that had guided economic policy for decades. Marcel Fratzscher, Moritz Schularick, Ottmar Edenhofer, Simon Tilford and Sebastian Dullien are among the many prominent economists in this Forum arguing that a new paradigm is urgently needed with new policies to address today's pressing issues, such as growing inequality, climate change and rising trade protectionism.

Figure of the Month

Financial Crises, 1870-2015

This figure from Moritz Schularick and Kaspar Zimmermann's article Towards a New Paradigm: Stabilising Financial Markets shows that as financial markets have grown larger and more complete over the last 50 years, the incidence of financial crises has actually risen. Click on the figure for further information.

Forum

Shifting Views on Trade Liberalisation

The analysis of several decades of trade liberalisation shows successes but also disappointed expectations. Sebastian Dullien illustrates the shifting views and policies on trade liberalisation and points out how changes in the perception of past outcomes are informing the policy recommendations of today.

Letter from America

The Federal Job Guarantee

How do we eliminate unemployment altogether? William Darity Jr. and Darrick Hamilton propose implementing a federal job guarantee in the US in order to ensure that every American who wants to work has access to a high quality job with a decent living wage and the sense of dignity that comes with it.

Forum

Paradigm Shifts in Economic Theory and Policy

In most countries, mainstream economic policy has not yet undergone any significant change, and there is little consensus on what, if anything, ought to replace it. However, Michael Jacobs and Laurie Laybourn-Langton argue that there are some signs of an emerging transition, at several levels.

Completely Open Access

Intereconomics 3/2016

The Editorial looks at the macroeconomic costs and benefits of hosting large international sporting events - a reading right in time for the FIFA World Cup 2018! The Forum takes on a much more serious issue in analysing the issues Europeans face in ageing.

Forum

A New Paradigm for Fiscal Policy?

Fiscal policy is about the role of the state in the economy. Xavier Ragot examines defines the old paradigm for fiscal policy within the framework of the recent financial crisis. Focusing on what went wrong in the business cycle, he considers a new paradigm and proposes some concrete changes, including a European unemployment reinsurance scheme.

Quote of the Month

Risk, Excess and Wastefulness

"The eurozone crisis is as much a tale of excess bank leverage and poor risk management in the core as of excess consumption and wasteful investment in the periphery."

from Simon Tilford and Christian Odendahl's Forum article Paradigm Shift in the Eurozone? The Market-Based Convergence Rationale

Article

ECB: Quo Vadis?

The European Central Bank has implemented a very ambitious monetary policy since the financial crisis of 2008, intervening heavily in the eurozone economies. This policy has generated substantial risks to both the ECB's primary task and its independence. Sylvester C. W. Eijffinger and Lex H. Hoogduin recommend a fundamental evaluation of the ECB's monetary policy strategy.

Editor's Choice

A New Transatlantic Trade War?

This Forum's title and its assertion that "tension is mounting between the EU and the US... giving rise to fears of a full-blown transatlantic trade war and a new wave of global protectionism" could be ripped straight from today's headlines. It actually appeared in 2002. Wolfgang Ischinger's article "We Have Little to Gain from Trade Disputes, but Very Much to Lose" remains as relevant today as it was then.

Editor's Choice

On the Distribution of Refugees in the EU

From an economic point of view, Martin Altemeyer-Bartscher et al. argue, it would be reasonable to distribute incoming refugees among all EU countries according to a key that reflects the differing costs of integration in the various member states. An efficient distribution would even out the marginal costs of integrating refugees, whilst taking account of the positive effects, for example in terms of the potential workforce additions in countries with declining populations and ageing societies.