Ideas are expensive. They are generated by brilliant minds, who do not simply appear out of nowhere. You need a stable and favourable economic and financial environment. You need social awareness about the importance of breakthrough innovations. And last but by no means least, you need luck.
In the last 20 years we have witnessed political and economic processes becoming more and more interconnected and interdependent. Still, it is taking us some time to acquire awareness of the mechanisms behind such processes. The bottom line of our first 20 years of this century is one: the gradual disappearance of the middle class, the rise to power of populist parties and an increasing inequality even between the richest. In these processes a major role is played by the banks, and the policies adopted to save them.
On March 12, the ECB held a press conference, in which Christine Lagarde announced and commented on the new measures to counter the economic downturn triggered by the spread of the virus. Below, we shortly review and explain these measures, compare the policies of Lagarde and Draghi, the previous ECB president, and give some final considerations on [Read More]
On 24 April 2013, the Financial Times published a short article written by Yves Mersch, a member of the European Central Bank’s (ECB) Executive Board. The title of the article, “Europe’s ills cannot be healed by monetary innovation alone”, can be interpreted either as a cry for help, or as a veiled threat coming from the ECB itself. How so? One needs to look at the context first: the institutional framework of the European Union’s (EU) economic governance was under duress on several fronts at the time. The two pillars on which Economic and Monetary Union (EMU) as created with the 1992 Maastricht Treaty was based, the monetary pillar, controlled by the ECB, and the fiscal pillar, with numerical fiscal rules to ensure national budgetary discipline, were proving both unsuccessful and insufficient for crisis management. In 2012 alone, the year before the article was written, Greece agreed to a second rescue package for €130bn; Spain formally requested financial assistance for up to €100bn to rescue its banking sector and implemented a €65bn austerity package; finally, Cyprus, too, asked for assistance, due to its large exposure to the neighbouring Greek economy. It was becoming increasingly clear that countering the crisis effectively required a concerted effort. It was also understandable to think that the two pillars alone were not enough to sustain the EU’s economic architecture.
In tempi recenti si è registrato un crescente interesse riguardo al tema della diseguaglianza dei redditi, a testimonianza del quale si è sviluppato un ampio dibattito sia in ambito accademico che nella sfera pubblica e politica. Il motivo di tale interesse risiede nella dinamica della diseguaglianza stessa. Per esempio (come mostra il grafico seguente), nel periodo che va dal 1979 al 2010, negli Stati Uniti il reddito del 20% più ricco della popolazione è quello associato al tasso di crescita maggiore, mentre il reddito del 20% più povero degli americani si è addirittura ridotto :
Che la diseguaglianza sia andata incrementando è dunque un fatto. Ma che ciò sia da considerarsi un problema, un evento positivo o neutrale, è invece oggetto di dibattito: secondo alcuni economisti, infatti, è l’incentivo monetario il traino dell’innovazione e del progresso, o più in generale ciò che spinge gli individui ad impegnarsi in qualsiasi ambito del processo produttivo.
With very few exceptions, international traders do not care for the political situation of a particular country when dealing with their business. Whether they are selling to Canada or to Sudan, their most prominent interest is profit making. It is indeed true that in a state-centric view of international political economy, where nation states assume the role of traders, protectionist policies and embargoes are widespread, yet seldom do they take moral considerations into account. Even the recent European economic sanctions against Russia are politically founded rather than appealing to issues of ethics. A question thus arises: are there reasons to believe morally founded appeals in international trade should be justified?
One of the great issues of today concerns equality among human beings throughout the world. This question rises in light of the great differences that exist among citizens of different countries and among citizens of the same countries in income, social mobility, welfare and general prosperity. There have been countless debates on the reasons of the current situation and on the measures that would best solve the problem. A rising point of view places the blame for our current predicament on free market capitalism, and its inevitable degeneration into a system were a few greedy individuals benefit at the expense of the rest of the population, increasing inequality until it reaches a breaking point. [Read More]
When Gramsci wrote that a crisis consists in the old dying and the new that cannot be born yet, he certainly did not have the European Union (EU) in mind. Yet, the “interregnum” he referred to, in which a variety of morbid symptoms appear, has also been the culmination of a paradoxical and overly complicated institutional system that is unique to the Union. The limbo the continent is stuck in at the moment makes it so that the EU cannot go forward without dragging its past burdens along. In this sense, the Euro-crisis represents the epitome of the incapacity of European policy-makers to overcome their cooperation problems while at the same time having to deal with unresolved issues. In particular, the Greek debt crisis, brought to the fore a distributive conflict that had always been implicit within the EU’s monetary union (Oatley, 2014): who would bear the cost of Greece’s excessive burden debt? Dinan’s optimism of the “impressive display of unity” shown by the European leaders (Dinan, 2010: 160) may not mesh well with the institutional reality of the EU. Here, I will argue how the European institutional framework may not be suitable for overcoming the crisis.
The aim of this article is to consider the question of the relationship between a political and administrative structure, federalism, and an outcome that is widely regarded as economic, income inequality. While not giving any definitive answer, I will try to provide an overview of some of the relevant literature on this issue. As such, I will begin by briefly explaining what we mean by federalism and why some countries would rather give more autonomy to their political subnational structures; then I will pose the question whether federalism is inherently skewed – that is, whether there is any bias towards conservatism. Following Erik Wibbels’s work, I will also focus on the distinction between fiscal and political federalism. Only then will I face the core problem of this relationship, the redistribution of income among the polity, or the regions. The use of some examples of economic and fiscal management in federal systems will help to understand how federalism can have deeply different outcomes in different countries.
La comparazione tra diverse political economies è un metodo molto interessante per enfatizzare le asimmetrie istituzionali ed economiche che coesistono nell’Eurozona. In questo campo di ricerca, Varieties of Capitalism ha assunto una posizione predominante e si rivela un approccio molto proficuo per comprendere le reazioni alla crisi nei diversi paesi europei. Come efficacemente descritto da Johnston, Hancke e Pant le economie con istituzioni corporative, ossia quelle che in Varieties of Capitalism sono definite Coordinated Market Economies (CMEs), hanno reagito meglio alla crisi a causa di un sostanziale vantaggio istituzionale. [Read More]