During the initial shock from COVID-19, it was understandable that governments and central banks would respond with massive injections of liquidity. But now policymakers need to take a step back and consider which forms of stimulus are really needed, and which risk doing more harm than good.
For 40 years, elites in rich and poor countries alike promised that neoliberal policies would lead to faster economic growth, and that the benefits would trickle down so that everyone, including the poorest, would be better off. Now that the evidence is in, is it any wonder that trust in elites and confidence in democracy have plummeted?
Only a fool would trust Facebook with his or her financial wellbeing. But maybe that’s the point: with so much personal data on some 2.4 billion monthly active users, who knows better than Facebook just how many suckers are born every minute?
Rising inequality and slow growth are widely recognized as key factors behind the spread of public discontent in advanced economies, particularly in the United States. But these problems are themselves symptoms of an underlying malady that the US political system may be unable to address.
What we measure affects what we do. If we focus only on material wellbeing – on, say, the production of goods, rather than on health, education, and the environment – we become distorted in the same way that these measures are distorted; we become more materialistic.
There is no reason economists should agree about what is politically possible. What they can and should agree about is what would have happened if their preferred policies had been implemented – and keep those lessons in mind as the next downturn approaches.
The “best” outcome of President Donald Trump’s narrow focus on the US trade deficit with China would be improvement in the bilateral balance, matched by an increase of an equal amount in the deficit with some other country (or countries). In fact, significantly reducing the bilateral trade deficit will prove difficult.
In just the past few days, the US Supreme Court has handed down a series of rulings favoring corporations over workers, and right-wing extremists over the majority of Americans. With the Court following Donald Trump down the path of racism, misogyny, nativism, and deepening inequality, it would appear that yet another pillar of American democracy has crumbled.
Across the eurozone, political leaders are entering a state of paralysis: citizens want to remain in the EU, but they also want an end to austerity and the return of prosperity. So long as Germany tells them they can’t have both, there can be only one outcome: more pain, more suffering, more unemployment, and even slower growth.
How has a country of under five million people become a world leader in developing holistic policies that promote democratic, sustainable, and inclusive economic growth? The answer lies in its people's belief that focusing on the welfare of all citizens not only enhances wellbeing, but also increases productivity.
US President Donald Trump's recently announced import tariffs on steel, aluminum, and $60 billion in other goods that the US imports from China each year are in keeping with his record of responding to nonexistent problems. Unfortunately, while Trump captures the world's attention, serious real problems go unaddressed.
In 1968, the year after riots erupted in cities throughout the US, the Kerner Commission, established by President Lyndon B. Johnson, famously concluded that the country was “moving toward two societies, one black, one white – separate and unequal.” Sadly, it is conclusion that still rings true.
The CEOs of Davos were euphoric this year about the return to growth, strong profits, and soaring executive compensation. Economists reminded them that this growth is not sustainable, and has never been inclusive; but in a world where greed is always good, such arguments have little impact.
There is nothing about the GOP’s recently-passed tax package that lives up to its proponents' promises; it is neither a reform effort nor an equitable tax cut. Rather, the bill embodies all that is wrong with the Republican Party, and to some extent, the debased state of American democracy.
As the advanced economies’ post-2008 recession fades into the distant past, global prospects for 2018 look a little better than in 2017. The shift from fiscal austerity to a more stimulative stance will reduce the need for extreme monetary policies, which almost surely have had adverse effects not just on financial markets but also on the real economy.
Globalization, which was supposed to benefit developed and developing countries alike, is now reviled almost everywhere, as the political backlash in Europe and the US in recent years has shown. The challenge is to minimize the risk that the backlash will intensify, and that starts by understanding – and avoiding – past mistakes.
US President Donald Trump has an uncanny ability to embrace economic policies, such as the Republicans' proposed tax cuts, that benefit him personally. In choosing the relatively moderate Jerome Powell to chair the Federal Reserve, he realized that an extremist would raise interest rates – any real-estate developer’s worst nightmare.
Developing countries are increasingly pushing back against the intellectual property regime foisted on them by the advanced economies over the last 30 years. They are right to do so, because what matters is not only the production of knowledge, but also that it is used in ways that put the health and wellbeing of people ahead of corporate profits.
A Trump administration staffed by plutocrats – most of whom gained their wealth from rent-seeking activities, rather than from productive entrepreneurship – could be expected to reward themselves. But the Republicans’ proposed tax reform is a bigger gift to corporations and the ultra-rich than most had anticipated.
Hurricane Harvey has left in its wake upended lives and enormous property damage, estimated by some at $150-180 billion. But the storm that pummeled the Texas coast for the better part of a week also raises deep questions about America's economic system and politics.
America’s plutocrats may disagree about how to rank the country’s major problems, but the solution to them is usually the same: lower taxes and deregulation, to “incentivize” investors and “free up” the economy. While President Donald Trump is counting on this package to make America great again, it won't work, because it never has.
When Donald Trump announced that he was withdrawing the US from the Paris climate agreement, he argued that the accord is bad for America and "unfair" to it. In fact, the Paris accord is very good for America, and it is the US that continues to impose an unfair burden on others.
The likely victory of Emmanuel Macron in the French presidential election has elicited a global sigh of relief. But it would be a mistake to conclude that discontent with the global economy has crested.
Vladimir Putin and other post-communist autocrats sell their system of “illiberal democracy” on the basis of pragmatism, not some universal theory of history. But while they have certainly been effective in stirring nationalist sentiment and stifling dissent, they have been less successful at nurturing long-term economic growth.
The island's deep and long-lasting recession has made its debt position unsustainable. But the latest fiscal plan imposed by the US commonwealth's federal overseers openly assumes that a Venezuela-scale depression will somehow bring about recovery.
In barely a month, US President Donald Trump has managed to spread chaos and uncertainty – and a degree of fear that would make any terrorist proud – at a dizzying pace. While most elected officials welcome being all things to all people, Trump has left no room for doubt about who he is.
There really is no silver lining to the cloud that now hangs over the US and the world. As bad as President-elect Donald Trump's administration will be for America’s economy and workers, its policies on climate change, human rights, the media, and ensuring peace and security are likely to be no less damaging for everyone else.
Donald Trump’s astonishing victory in the US presidential election has made one thing abundantly clear: too many Americans – particularly white male Americans – feel left behind. Unfortunately, he is unlikely to pursue the policy agenda his voters need.