THOUGHT LEADERS

Transatlantic Perspectives

Michael Boskin and Hans-Werner Sinn

Will the euro displace the dollar as the world’s principal reserve currency? How should financial markets be re-regulated without stifling innovation? Should the European Central Bank focus on growth, as America’s Fed does? Is Germany’s export-led growth strategy a threat to its trading partners?

RECENT COMMENTARIES

FEATURED COMMENTARIES

Saving the Greek Sinner

Hans-Werner Sinn Series: Transatlantic Perspectives

2010-02-23

The Greek disaster was possible because its government deceived its European partners for years with faked statistics. The other euro-zone countries, fearing a massive loss of trust in the common currency, have no choice but to come to the rescue, but the price for Greece will be a significant loss of sovereignty.... read

Comments: 2 Recommended: 0 Read: 2866

The Fiscal Crisis Down Below

Michael Boskin Series: Transatlantic Perspectives

2010-01-22

Sub-national governments – states, countries, cities, provinces, towns, and special districts – play different roles from country to country, but usually deliver important public services. In many countries, their fiscal position has collapsed under the combined weight of mismanagement and the global economic and financial crisis.... read

Comments: 1 Recommended: 0 Read: 3929

Insecure Securities

Hans-Werner Sinn Series: Transatlantic Perspectives

2009-12-23

Once upon a time, stocks were risky and collateralized securities were safe. That time is over, as the collapse of the US mortgage securitization market has exposed the once-vaunted American financial system's underlying lack of trustworthiness.... read

Comments: 2 Recommended: 0 Read: 5227

Industrial Policy Returns from the Grave

Michael Boskin Series: Transatlantic Perspectives

2009-11-24

One of the worst responses by officials to the financial crisis and deep recession has been to revive “industrial policy.” Governments' use of subsidies, mandates, regulation, and capital investment to pick industrial winners and losers failed in the 1970's and 1980's, and it is just as bad an idea today.... read

Comments: 0 Recommended: 0 Read: 4033

Americans are from Italy, Europeans are from Japan

Hans-Werner Sinn Series: Transatlantic Perspectives

2009-10-23

Many people believe that America will try to play “the Italian card”: inflating away its public debt and devaluing the currency in order to maintain international competitiveness. Europe, meanwhile, also faces skyrocketing public debt, but the strengthening euro makes inflation impossible, making Japanese-style stagnation a serious risk.... read

Comments: 0 Recommended: 1 Read: 9036

The Government Debt Bomb

Michael Boskin Series: Transatlantic Perspectives

2009-09-23

As the world economy begins to recover, renewed attention is being paid to enormous fiscal deficits and vast expansion of government debt. Fiscal exit strategies must be planned and implemented soon, before stimulus programs become permanently entrenched, develop powerful constituencies, and greatly increase the risk of rising interest rates, inflation, and taxation.... read

Comments: 2 Recommended: 0 Read: 4963

The Promise and Peril of Global Change

Hans-Werner Sinn Series: Transatlantic Perspectives

2009-08-24

The forces of globalization that were liberated by the fall of Communism have created a better world, with rapid economic convergence and shrinking inequality. But the future is also fraught with danger, as the changing global economic power structure will inevitably re-shape the geopolitical order in ways that incumbent powers, particularly the US, will not easily accept.... read

Comments: 0 Recommended: 0 Read: 5163

Of Banks and Bailouts

Michael Boskin Series: Transatlantic Perspectives

2009-07-23

PALO ALTO – Early signs of a manufacturing rebound, already strong in Asia, lend hope for some modest recovery from today’s deep global recession. But a strong and durable economic expansion is unlikely until progress is made in dealing with the toxic assets poisoning the balance sheets of financial institutions and bedeviling policymakers almost everywhere.... read

Comments: 1 Recommended: 0 Read: 6565

Is the Bank Crisis Over?

Hans-Werner Sinn Series: Transatlantic Perspectives

2009-06-23

In recent months, US bank shares have rebounded, and some banks have even succeeded in repaying at least part of their government-provided capital. But this may only be a temporary improvement in expectations rather than a sign of permanent recovery, as the size of the banks’ hidden losses on their balance sheets is probably enormous, with much of it yet to be written off. ... read

Comments: 0 Recommended: 0 Read: 7460

Grading Obamanomics	Michael Boskin
It is too soon to gauge the full economic impact of Barack Obama’s economic policies, but a preliminary read indicates limited short-term benefit at large long-term cost. The administration is exploiting a crisis atmosphere to enact a vast agenda that would reengineer the American economy, from autos and financial services to health care, energy, and the distribution of income.... read

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Grading Obamanomics

Michael Boskin Series: Transatlantic Perspectives

2009-05-25

It is too soon to gauge the full economic impact of Barack Obama’s economic policies, but a preliminary read indicates limited short-term benefit at large long-term cost. The administration is exploiting a crisis atmosphere to enact a vast agenda that would reengineer the American economy, from autos and financial services to health care, energy, and the distribution of income.... read

Comments: 0 Recommended: 0 Read: 8030

Forget Inflation

Hans-Werner Sinn Series: Transatlantic Perspectives

2009-02-26

To paraphrase Winston Churchill, never have so many billions of dollars been pumped out by so many governments and central banks. But fears of inflation, shared by Germany and other countries, are simply not well founded.... read

Comments: 0 Recommended: 0 Read: 11191

Why Does Angela Merkel Hesitate?

Hans-Werner Sinn Series: Transatlantic Perspectives

2008-12-29

German Chancellor Angela Merkel has been widely criticized for playing the spoiler in the competition to provide billions to prevent a breakdown of the world economy. But there are good economic reasons for Germany to wait before implementing a stimulus package, and Merkel's stance can also be explained by justified fears of the EU's redistribution machinery.... read

Comments: 0 Recommended: 0 Read: 11038

Will the Euro Survive the Current Crisis?

Martin Feldstein Series: Transatlantic Perspectives

2008-11-24

The European Economic and Monetary Union is about to celebrate its tenth anniversary, having functioned well since its introduction in 1999. But the current economic crisis may provide a more severe test of the euro’s ability to survive than any it has faced so far.... read

Comments: 1 Recommended: 0 Read: 15985

America's Problems Run Deeper than Wall Street

Martin Feldstein Series: Transatlantic Perspectives

2008-09-23

Less than two months remaining before America’s presidential election, the US finds itself in the middle of a financial crisis, with the economy sliding into recession, monetary policy already at maximum easing, and fiscal transfers impotent. That is an unenviable situation, to say the least, for any incoming president.... read

Comments: 8 Recommended: 0 Read: 21293

What is the Dollar’s Sustainable Value?

Martin Feldstein Series: Transatlantic Perspectives

2008-07-23

The key determinant of the dollar’s long-term value is that it must decline enough to shift the US trade balance from today’s deficit to a surplus. Over the longer run, however, because the US trade deficit depends on the dollar's real value, inflation differentials could be a more significant force in determining the path of its exchange rate.... read

Comments: 1 Recommended: 0 Read: 17177

Closing the US-Europe Technology Gap

Alberto Alesina and Francesco Giavazzi Series: Transatlantic Perspectives

2003-09-26

In the second half of the 1990's, Europe's average annual growth rate of productivity amounted to 0.7%, while the US hummed along at 1.4%. However, if we distinguish between the industries that produce information and communications technologies (ICT) and those that are simply users of such technologies, we can see that the productivity growth gap stems almost entirely from the weakness of Europe's ICT producing sector. Annual productivity growth in sectors that are users of ICT technologies averaged 0.63% in the US between 1995 and 2000, and a very similar 0.41% in Europe. ... read

Comments: 0 Recommended: 0 Read:

Europe is Working Longer

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-03-23

France’s decision effectively abolishing its 35-hour workweek by allowing employers to increase working hours – and pay – marks a reversal of a decades-old trend. In the 1980’s and 1990’s, most European countries reduced working hours: Germany went from more than 40 to 38 per week, the UK from 40 to 37, Denmark from 39 to 37, and France from 40 to 35. Today, however, as Europeans struggle with high unemployment and stagnating living standards, they may have to work longer to cope with globalization.... read

Comments: 0 Recommended: 0 Read: 25056

Will Europe’s Sinners Save Themselves?

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-01-31

When German officials pushed in the 1990’s for the Stability and Growth Pact as a prerequisite for giving up the Deutschmark, they did not anticipate that Germany would be the first country to violate the pact. While the pact says that a government cannot borrow more than 3% of its GDP, Germany’s public-finance deficit reached 3.7% of GDP and more from 2002 to 2004. ... read

Comments: 0 Recommended: 0 Read: 24987

Germany’s Pathological Export Boom

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-10-14

Germany is the world’s industrial bazaar. No other country can offer its international clients such a broad variety of industrial products. Germany has 450 hidden world champions for niche products, and is home to 15 of the 20 biggest trade fairs in the world. It is also the world’s top exporter of merchandise and the second-largest exporter of goods and services.... read

Comments: 0 Recommended: 0 Read: 24565

Germany’s Five Shocks

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-07-28

Over the last decade, Germany has been the slowest growing economy in the European Union, and Europe has been the slowest growing continent in the world. From 1995 to 2005, Germany will have grown by only 14.6%, while the old EU on average will have grown by 24%, the US by 39.9%, and the world economy by 45.6%. Why has Germany performed so badly?... read

Comments: 0 Recommended: 0 Read: 24140

Locust Capitalism

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-05-25

Germany invented socialism. Karl Marx and Friedrich Engels were Germans. The Social Democratic movement that shaped the modern European welfare state also originated in Germany. Although the country profited greatly from its reintegration into the world trading system after World War II, Germany never really came to terms with Anglo-Saxon capitalism and skepticism about it still runs deep. ... read

Comments: 0 Recommended: 0 Read: 22933

A German Glimmer in a Global Boom

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-12-28

In 2004, the world economy grew at a rate of 5.1%, the fastest pace in the last 28 years. While Ifo`s World Economic Climate indicator, generated from quarterly surveys of 1,200 experts in 90 countries, worsened slightly during the first three quarters of 2005, it rose again in the last quarter, indicating a continuation of the boom. In 2005, growth is estimated to have been about 4.3%, and a similar rate can be expected in 2006, marking a period of sustained rapid global growth unseen since the 1970’s.... read

Comments: 0 Recommended: 0 Read: 21710

The Next Welfare State

Hans-Werner Sinn Series: Transatlantic Perspectives

2006-02-27

Hans-Werner Sinn... read

Comments: 0 Recommended: 0 Read: 21616

America's Problems Run Deeper than Wall Street

Martin Feldstein Series: Transatlantic Perspectives

2008-09-23

Comments: 8 Recommended: 0 Read: 21293

Don’t Forget Wim Duisenberg’s Legacy	Melvyn Krauss
The most surprising and controversial thing about last December’s rate hike by the European Central Bank was that, after two and a half years of keeping interest rates at exceptionally low levels, the bank ventured an increase of only 25 basis points with no promise of more to come. Political pressure on Europe’s central bank may be the reason for that timid move.... read
The Reform Game	Alberto Alesina and Francesco Giavazzi
Reform, when long discussed but never implemented, can do far more harm than good. Anticipation of a reform – say, of pension rules, the health system, or unemployment benefits – worries everyone who might feel the impact. In response, they cut consumption and save more, expecting that sooner or later they will have to start paying for some of the services they had been used to getting free or at subsidized rates. ... read

AUTHOR INFO

Michael Boskin

Michael Boskin, currently Professor of Economics at Stanford University and a senior fellow at the Hoover Institution, was Chairman of President George H. W. Bush’s Council of Economic Advisors, 1989-1993.

Hans-Werner Sinn

Hans-Werner Sinn is Professor of Economics and Public Finance, University of Munich, and President of the Ifo Institute.

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THOUGHT LEADERS

Transatlantic Perspectives

Michael Boskin and Hans-Werner Sinn

Saving the Greek Sinner

The Fiscal Crisis Down Below

Insecure Securities

Industrial Policy Returns from the Grave

Americans are from Italy, Europeans are from Japan

The Government Debt Bomb

The Promise and Peril of Global Change

Of Banks and Bailouts

Is the Bank Crisis Over?

Grading Obamanomics

Forget Inflation

Why Does Angela Merkel Hesitate?

Will the Euro Survive the Current Crisis?

America's Problems Run Deeper than Wall Street

What is the Dollar’s Sustainable Value?

Closing the US-Europe Technology Gap

Europe is Working Longer

Will Europe’s Sinners Save Themselves?

Germany’s Pathological Export Boom

Germany’s Five Shocks

Locust Capitalism

A German Glimmer in a Global Boom

The Next Welfare State

America's Problems Run Deeper than Wall Street

AUTHOR INFO

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