The Eurozone crisis continues to take centre stage. This column discusses how deep the EZ crisis is, how long it will last, and what should be the policy priorities. A number of findings emerge. First, the difference in labour market performance between the US and the Eurozone is one of degree but not of kind. Second, the economic consequences of the sovereign debt crisis will be mostly gone by 2018, but the political crisis will continue. Third, enforcing fiscal rules via political arm twisting is a recipe for disaster. Market discipline must instead be brought back, but without financial fragmentation. Limited and conditional Eurobonds are the best way to do so.
Clinton. Bush. Kennedy. Political family dynasties have survived the establishment of democracies in the developed and developing world and, in some cases, are strengthening. This column argues that political dynasties are still with us, and that it’s fairly easy to see why. Whoever said that elections are the only time that the vote of the richest citizen is equivalent to that of the poorest needs to start rethinking whether this still holds true.
Early school leaving and criminal behaviour are important social problems. This column argues that delinquency and arrests both lead to early school leaving. The findings show that the overall reduction in education due to delinquency is at least as large as the reduction due to arrest. Crime prevention efforts thus need to extend beyond youth who come into contact with the justice system.
Economists have been exploring the relationship between prosperity and trust since the 1950s. This column explores the possible relationships, arguing that enhanced economic prosperity acts as a signal that fellow citizens are trustworthy. The more optimistic assessment then breeds trust among individual citizens. This theory suggests the possibility of a mutual feedback between trust and economic growth.
Economic models suggest that competition will prevent those subjected to discrimination from being affected adversely. This column uses an unusual case study of sex workers in Singapore to reveal that having many actors on both sides of the market does not, in fact, eliminate discrimination. Policy intervention remains the best tool to end price discrimination.
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- Back from the brink: Policy reform and debt relief in Greece
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- Consumer spending and property taxes
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- A pragmatic approach to external debt: The write-down of Germany’s debts in 1953
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- Iceland, Greece and political hectoring