The idea of permanently raising inflation targets to 4%, first proposed by IMF chief economist Olivier Blanchard, has been endorsed by a number of other academics, including, most recently, Paul Krugman. Unfortunately, the problem of ensuring a smooth and convincing transition to a new target is perhaps insurmountable.
Many details about Stephen Paddock’s reasons for opening fire on a Las Vegas concert last weekend have yet to be discerned. But so-called “lone wolf” mass shooters are not a new phenomenon, and past episodes can offer important clues about the thought processes and experiences that motivate them.
Related:
IAN BURUMA | Murder Unincorporated
Observers have been wringing their hands over Germany's recent election, in which the large mainstream parties, the CDU and the SPD, suffered significant setbacks, while the far right exceeded expectations. But the election also upended a governing coalition that had avoided desperately needed reforms for too long.
Related:
ANATOLE KALETSKY | Europe's Battle on Four Fronts
PHILIPPE LEGRAIN | Macron's Challenge for Europe
Institutions matter, especially in a period of economic, political, and social fluidity, when they shield countries from frequent volatility and reduce the risk of costly shocks. The longer it takes to restore confidence in them, the greater the impediments to our wellbeing and that of our children.
There is more to Spain than the simmering confrontation between the government and the would-be separatists of the Catalonia region. As even that conflict shows, the country deserves notice for its resistance to divisive anti-immigrant and xenophobic sentiment and politics in recent years.
Although the Sustainable Development Goals are almost boundless in their ambition, they are easily achievable for a generation that is wealthier and more technologically advanced than any that came before it. The real constraint is not economic scarcity, but political cynicism.
In the 1990s, South Korea waited for a crisis to erupt before responding with necessary reforms. But now the country is confronting a new set of internal and external risks, which it should nip the bud, both by pursuing domestic economic reforms and by working with China and the US to defuse the North Korean nuclear threat.
There is little disagreement that the immediate response to the 2008 financial crisis averted another Great Depression. But whether the safeguards in place today are enough to prevent a similar large-scale disaster remains an open question.
Yanis Varoufakis, Greece’s former finance minister, discusses how to negotiate with the EU and his proposal to introduce fiscal money with Anatole Kaletsky, Co-Chairman of Gavekal Draganomics, David Alandete, Managing Editor of El Pais, and Torsten Riecke, Handelsblatt’s international correspondent.
We are living in a brave new world of disinformation and propaganda, and as long as only its purveyors have the data needed to understand it, the responses we craft will remain inadequate. Because they are also likely to be poorly targeted, they may even end up doing more harm than good.
PARIS – For some time now, there has been concern that central bankers have “run out of bullets.” Having lowered their policy rates to near zero, they have engaged in increasingly extravagant measures such as “quantitative easing” and “forward guidance.” Given the fog cast over real economic activity by the financial crisis, it is difficult to offer a definitive assessment of just how well or badly those measures have worked. But it is clear that there must be a better way to do things.
There is no longer any reason to let the zero bound on nominal interest rates continue to hamper monetary policy. A simple and elegant solution is to phase in a switchover to a fully electronic currency, where paying interest, positive or negative, requires only the push of a button. And with paper money – particularly large-denomination notes – arguably doing more harm than good, currency modernization is long overdue. Using an electronic currency, central banks could continue to stabilize inflation exactly as they do now. (Citigroup’s chief economist, Willem Buiter, has suggested numerous ways to address the constraint of paper currency, but eliminating it is the easiest.)
A second, less elegant idea is to have central banks simply raise their target inflation rates from today’s norm of 2% to a higher but still moderate level of 4%. The idea of permanently raising inflation targets to 4% was first proposed in an interesting and insightful paper led by IMF chief economist Olivier Blanchard, and has been endorsed by a number of other academics, including, most recently, Paul Krugman. Unfortunately, the problem of making a smooth and convincing transition to the new target is perhaps insurmountable.
To continue reading, please log in or enter your email address.
Registration is quick and easy and requires only your email address. If you already have an account, please proceed to Log in.