Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Blyth’

How the Eurozone Might Split

Posted by hkarner - 13. Januar 2018

Date: 12-01-2018
Source: Foreign Affairs By Mark Blyth and Simon Tilford

Could Germany Become a Reluctant Hegemon?

In February 2016, the Organization for Economic Cooperation and Development opined that developed country growth prospects had “practically flat-lined” and that only a stronger “commitment to raising public investment would boost demand and help support future growth.” Fast-forward some 24 months, and despite Brexit, the election of U.S. President Donald Trump, and the rise of the populist Alternative für Deutschland in Germany, the euro seems to be a much better bet than it has been in a long time. But has the euro really weathered the crisis and come out stronger? In this article, we make two interrelated arguments about the future of the eurozone.

The first is that even if the recent economic upturn continues, the eurozone could still split in two over the medium to long term thanks to a built-in design flaw in the eurozone architecture that makes it extremely difficult for the eurozone governors to deal with persistent export and import imbalances between states. Den Rest des Beitrags lesen »

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The Austerity Delusion: Why a Bad Idea Won Over the West

Posted by hkarner - 26. April 2013

Date: 26-04-2013
Source: Foreign Affairs By Mark Blyth

Unable to take constructive action toward any common end, the U.S. Congress has recently been reduced to playing an ongoing game of chicken with the American economy. The debt-ceiling debacle gave way to the “fiscal cliff,” which morphed into the across-the-board cuts in military and discretionary spending known as “sequestration.” Whatever happens next on the tax front, further cuts in spending seem likely. And so a modified form of the austerity that has characterized policymaking in Europe since 2010 is coming to the United States as well; the only questions are how big the hit will end up being and who will bear the brunt. What makes all this so absurd is that the European experience has shown yet again why joining the austerity club is exactly the wrong thing for a struggling economy to do.

The eurozone countries, the United Kingdom, and the Baltic states have volunteered as subjects in a grand experiment that aims to find out if it is possible for an economically stagnant country to cut its way to prosperity. Austerity — the deliberate deflation of domestic wages and prices through cuts to public spending –– is designed to reduce a state’s debts and deficits, increase its economic competitiveness, and restore what is vaguely referred to as “business confidence.” The last point is key: advocates of austerity believe that slashing spending spurs private investment, since it signals that the government will neither be crowding out the market for investment with its own stimulus efforts nor be adding to its debt burden. Consumers and producers, the argument goes, will feel confident about the future and will spend more, allowing the economy to grow again. Den Rest des Beitrags lesen »

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