Time and again “experts” from all areas try to exert pressure on the European Central Bank to relax its anti-inflationary monetary policy in order to increase economic growth in the euro area. But monetary policy is not the answer to Europe’s ills. Indeed, a babel of criticism may prevent people from seeing that the euro area has witnessed ample economic progress since the euro’s launch. The broad macroeconomic fundamentals of sustained growth are, in fact, more favorable today than they have been for years. Europe’s challenge is to exploit this economic potential. It is thus important to be clear about what monetary policy can and cannot do to contribute to Europe’s growth so that other necessary – though often politically difficult – reforms are not neglected. Although there are some theoretical ambiguities, the best available evidence suggests that, in the longer term, inflation is harmful to both output and welfare. The corollary of this is that the best contribution a central bank can make to assure that growth is achieved over the long run is to pursue a policy aimed at maintaining price stability over the medium term. This consensus view is enshrined, explicitly, in the statute of the ECB, which unambiguously states that its “primary objective...shall be to maintain price stability.” But what about the short term? Many commentators suggest that a monetary policy directed at price stability may lead to protracted, and in extreme cases, permanent negative movements in output. The mechanism invoked is
European Union leaders meeting in Brussels have given the go-ahead to talks with Britain on post-Brexit trade relations. But, as European Council President Donald Tusk has said, the most difficult challenge – forging a workable deal that secures broad political support on both sides – still lies ahead.
Jean Pisani-Ferry argues that Britain has no clear objective, owing to divisions in the ruling Conservative party, and that the EU-27 should provide the missing vision.
Harold James sees two possible outcomes to the talks: a “Hamlet" ending, with the stage littered with corpses, or a scenario recalling one of the Bard’s bleaker comedies, "All’s Well That Ends Well."
Rupert Murdoch’s sale of 21st Century Fox’s entertainment assets to Disney for $66 billion may mark the end of the media mogul’s career, which will long be remembered for its corrosive effect on democratic discourse on both sides of the Atlantic.
From enabling the rise of Donald Trump to hacking the telephone of a murdered British schoolgirl, Murdoch’s media empire has staked its success on stoking populist rage.
For Nina L Khrushcheva, Murdoch is the ultimate Guilty Man responsible for fueling the political polarization that has eroded governance in the US.
The late Jonathan Schell believed that Murdoch's power mostly stemmed from his willingness to pander to atavism and anti-Semitism to boost Fox News’ ratings.
But Murdoch hasn't been acting alone, argues Lucy P. Marcus, for he has been enabled by shareholders who turn a blind eye to his methods and toxic corporate culture.
As inequality continues to deepen worldwide, we do not have the luxury of sticking to the status quo.
Unless we confront the inequality challenge head on – as we have just begun to do with another existential threat, climate change – social cohesion, and especially democracy, will come under growing threat.
Despite seemingly robust indicators, the world economy may not be nearly as resilient to shocks and systemic challenges as the consensus view seems to believe. The absence of a vigorous rebound from the Great Recession means that the global economy never recouped lost growth.
Since the hyperinflation of the 1970s, which central banks were right to combat by whatever means necessary, maintaining positive but low inflation has become a monetary-policy obsession. But, because the world economy has changed dramatically since then, central bankers have started to miss the monetary-policy forest for the trees.
Jeffrey Frankel, a professor at Harvard University’s Kennedy School of Government and a former member of President Bill Clinton’s Council of Economic Advisers, outlines the five criteria he uses to judge the efficacy of tax reform efforts. And in his view, the US Republicans’ most recent offering fails miserably.
CRISPR-Cas – a gene-editing technique that is far more precise and efficient than any that has come before it – is poised to change the world. But ensuring that those changes are positive – helping to fight tumors and mosquito-borne illnesses, for example – will require scientists to apply the utmost caution.
The Year Ahead 2018
The world’s leading thinkers and policymakers examine what’s come apart in the past year, and anticipate what will define the year ahead.