politics, economy and employment & labour
Social Europe is an award-winning digital media publisher. We use the values of freedom, sustainability and equality as the foundation on which we examine society’s most pressing challenges. We are committed to publishing cutting-edge thinking and new ideas from the most thought-provoking people. This archive page brings together Social Europe articles on the economy.
Economic growth, as we learned long ago from the works of economists like MIT’s Robert M. Solow, is largely driven by learning and innovation, not just saving and the accumulation of capital. Ultimately, economic progress depends on creativity. That is why fear of “secular stagnation” in today’s advanced economies has many wondering how creativity can be […]
Slowly but surely a new consensus is emerging emphasizing the need for Europe’s currency union to organize public investment as a means to overcome its crisis, by now in its seventh year; the outlook being truly grim. Back in July President-elect of the European Commission Jean-Claude Juncker called for a €300bn public-private investment program. ECB […]
The global economy is like a jetliner that needs all of its engines operational to take off and steer clear of clouds and storms. Unfortunately, only one of its four engines is functioning properly: the Anglosphere (the United States and its close cousin, the United Kingdom). The second engine – the eurozone – has now […]
Growth in the Eurozone has declined significantly over recent months, raising fears that Europe could be heading toward another economic crisis. Bob Hancké writes on what it would take to generate growth in Eurozone states. He argues that the best – and possibly only – option for European governments is to adopt a strategy of public investment […]
Everyone knows that the Eurozone suffered a crisis from 2010 to 2012, as periphery countries could no longer sell their debt. A superficial analysis puts this down to profligate governments, but look more closely and it becomes clear that the formation of the Euro itself led to an excessive monetary stimulus in these periphery countries. […]
Every economic collapse brings a demand for debt forgiveness. The incomes needed to repay loans have evaporated, and assets posted as collateral have lost value. Creditors demand their pound of flesh; debtors clamor for relief. Consider Strike Debt, an offshoot of the Occupy movement, which calls itself “a nationwide movement of debt resisters fighting for economic […]
When, almost a year ago, Paul Krugman wrote six posts within three days laying into the stance of Germany on the Eurozone’s macroeconomic problems, even I thought that maybe this was a bit too strong, although there was nothing in what he wrote that I disagreed with. Yet as Germany’s stance proved unyielding in the face of […]
Falling wages, savage cuts and sham employment expose the UK recovery as bogus. Without a new vision we’re heading for social conflict. The UK economy has been in difficulty since the 2008 financial crisis. Tough spending decisions have been needed to put it on the path to recovery because of the huge budget deficit left behind […]
Economic recovery in the Eurozone is not delayed. It is non-existent. The Financial Times for the first day of October carried several articles assessing the European economies, written as if a prize would go to the most pessimistic — stagnation and decline of EU manufacturing, the European Central Bank initiates asset purchases to prevent deflation […]
The discussion has so far followed easily predictable national patterns: Creditor countries do not object to deflation, because it increases the real value of their investment, whereas debtor countries’ repayment burdens would grow heavier. In a closed economy, to every credit there must a corresponding debt. But consider individual countries: some run a large foreign […]
Slow growth in the Eurozone has become endemic since the start of the sovereign debt crisis in 2010. This is made very clear in Figure 1, which contrasts the growth experience of the Eurozone with the non-Eurozone EU-member countries since the start of the financial crisis in 2007. What is striking is that up to […]
It has been pretty clear since at least the spring of this year that the ECB was keen to see the euro weakening. At the time the euro stood near to $1.40. Policymakers in a number of euro area member states issued calls for a more competitive exchange rate, directing barely hidden criticisms in this […]
Is a shrinking population always a bad thing? Judging by the lamentations of some economists and policymakers in the advanced economies, where people are living longer and birth rates have fallen below replacement levels, one certainly might think so. In fact, the benefits of demographic stability – or even slight decline – outweigh any adverse […]
Two years have passed since Mario Draghi promised to do “whatever it takes” to save the euro. The bond markets have calmed down but the crisis of the euro zone has not yet abated. Isolated pieces of positive information do not automatically imply a sustained recovery let alone justify triumphalism. While improving marginally, the rate of unemployment […]
In recent weeks, the managers, employees, and customers of a New England chain of supermarkets called “Market Basket” have joined together to oppose the board of director’s decision earlier in the year to oust the chain’s popular chief executive, Arthur T. Demoulas. Their demonstrations and boycotts have emptied most of the chain’s seventy stores. What was […]
Macroeconomic forecasts produced with macroeconomic models tend to be little better than intelligent guesswork. That is not an opinion – it is a fact. It is a fact because for decades many reputable and long standing model based forecasters have looked at their past errors, and that is what they find. It is also a […]
One of the arguments frequently made against the euro is that the Eurozone represents a ‘non-optimal’ currency area. This derives from the notion that the variations between regions within the Eurozone are simply too large for them to share a single currency without encountering problems. Waltraud Schelkle assesses this argument by comparing the experience of the Eurozone […]
Ten years ago, the world emerged from the dot-com bust and started to look more soberly at the Internet’s potential. While speculative greed and fear of missing out might have overplayed the short-term outlook, the Internet’s immense longer-term prospects were never in doubt. I, and other optimistic economists, assumed that free information and communication would […]
Poor countries export raw materials such as cocoa, iron ore, and raw diamonds. Rich countries export – often to those same poor countries – more complex products such as chocolate, cars, and jewels. If poor countries want to get rich, they should stop exporting their resources in raw form and concentrate on adding value to […]
“You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers,” President Obama said Thursday. He was referring to American corporations now busily acquiring foreign companies in order to become non-American, thereby reducing their U.S. tax bill. But the President might as well have been talking about all […]
The European economy is still in crisis. Real incomes in the Euro area are below the level of 2008 and unemployment is in the double digits in the southern European countries. While the crisis has originated in the USA, it is Europe that has fared worse. The European economic policy regime and European institutions, far […]
