The wrong track also leads someplace: Milton Friedman’s presidential address at 50

Milton Friedman’s presidential address to the American Economic Association holds a mythical status as the harbinger of the supply-side counter-revolution in macroeconomics – centred on the rejection of the long-run Phillips-curve inflation–unemployment trade-off. Friedman (seconded by Edmund Phelps) argued that the long run is determined by ...

The New Normal: Demand, Secular Stagnation and the Vanishing Middle-Class

The U.S. economy is widely diagnosed with two ‘diseases’: a secular stagnation of potential U.S. growth, and rising income and job polarization. The two diseases have a common root in the demand shortfall, originating from the ‘unbalanced’ growth between technologically ‘dynamic’ and ‘stagnant’ sectors. To understand how the short-run demand...

The New Normal: Demand, Secular Stagnation and the Vanishing Middle-Class

Medicijnen zijn goedkoop

Uit protest tegen de onaanvaardbare hoge prijs van een medicijn tegen taaislijmziekte heeft een Haagse apotheker aangekondigd het medicijn met de merknaam ''Orkambi'' na te maken tegen een fractie van de prijs die de Amerikaanse fabrikant Vertex van het medicijn rekent (à 170.000 euro per patiënt per jaar). Opmerkelijk genoeg staat de...

How a Flawed Structure is Hurting the Eurozone—Economically and Politically

Euroland: Will the Netherlands be the next domino to fall?

Austerity has nurtured resentments that will likely make the populist right PVV the biggest winner in the March 15 election — but without the majority or the allies needed to govern

What Mainstream Economists Get Wrong About Secular Stagnation

Forget the myth of a savings glut causing near-zero interest rates. We have a shortage of aggregate demand, and only public spending and raising wages will change that.

Rejet wallon du CETA, nouvel accroc pour le libre-échange

Alors que les chefs d’État du Canada et des pays membres de l’Union européenne s’apprêtaient à se réunir à Bruxelles le 27 octobre prochain pour adopter le texte de l’Accord économique et commercial global (AECG, plus souvent désigné sous l’acronyme anglais CETA), deux parlements régionaux belges viennent d’y opposer leur veto. Cette décision...

De arbeidsinkomensquote in macro-economisch perspectief

Er is hernieuwde aandacht voor de AIQ omdat deze in bijna alle OESO-landen een dalende trend vertoont. Er zijn verschillende<br/>macro-economische oorzaken voor de daling aan te wijzen, zoals robotisering, globalisering en arbeidsmarktderegulering. Gevolg is dat de vraag daalt, wat de potentiële economische groei reduceert.

Carbon Emissions and Economic Growth: Production-based versus Consumption-based Evidence on Decoupling

We assess the Carbon-Kuznets-Curve hypothesis using internationally consistent and comparable production-based versus consumption-based CO2 emissions data for 40 countries(and 35 industries) during 1995-2007 from the World Input Output Database (WIOD). Theestimates for per capita CO2 emissions are truly comprehensive as these include all...

Modelling the impact of a national minimum wage in South Africa: Are general equilibrium models fit for purpose?

Predicting the impact of a national minimum wage: are the general equilibrium models up to the task?

This article analyses whether computable general equilibrium (CGE) models are suitable for projecting the likely consequences of implementing a national minimum wage. Referring to modelling exercises undertaken by the National Treasury and the Development Policy Research Unit (DPRU), it shows that their projection of a strongly negative impact...

CETA Without Blinders: How Cutting ‘Trade Costs and More’ Will Cause Unemployment, Inequality and Welfare Losses

Proponents of the Comprehensive Economic and Trade Agreement (CETA) emphasize its prospective economic benefits, with economic growth increasing due to rising trade volumes and investment. Widely cited official projections suggest modest GDP gains after about a decade, varying from between 0.003% to 0.08% in the European Union and between 0.03%...

How the Invisible Hand is Supposed to Adjust the Natural Thermostat: A Guide for the Perplexed

Mainstream climate economics takes global warming seriously, but perplexingly concludes that the optimal economic policy is to almost do nothing about it. This conclusion can be traced to just a few “normative” assumptions, over which there exists fundamental disagreement amongst economists. This paper explores two axes of this disagreement. The...

Myths, Mix-ups and Mishandlings: What Caused the Eurozone Crisis?

The Eurozone crisis has been wrongly interpreted as either a crisis of fiscal profligacy or of deteriorating unit-labour cost competitiveness (caused by rigid labour markets), or a combination of both. Based on these diagnoses, crisiscountries have been treated with the bitter medicines of fiscal austerity, drastic wage reductions, and far...

Het nut van ontslagbescherming. Onzeker werk: De grens in bereikt (1)

Versoepeling van het ontslagrecht past goed bij kostenbeheersing en loonmatiging. Maar worden bedrijven er ook slimmer van? Nee, laten Alfred Kleinknecht, Ro Naastepad en Servaas Storm zien. Flexibele arbeidsverhoudingen beïnvloeden innovatie en productiviteitsgroei negatief, vooral ook omdat kennismanagement bij kortere dienstverbanden...