Global Crisis Debate

Banking reform: Do we know what has to be done?

Moderator: Wouter den Haan (London School of Economics)

There have been a lot of proposals for new legislation and some have already been implemented. However, many questions remain. Has enough been done to reduce the chance of another financial crisis? How fast should new rules be implemented? What should happen during the transition period? Are governments overreaching and is the new regulation going to stifle growth in the financial sector? This debate is about these questions.

 

What's the use of economics?

Moderator: Richard Baldwin (Graduate Institute, Geneva and CEPR)

Economics is under fire both from outside and inside the profession for irrelevance, arrogance, and more. This new Vox debate focuses on two questions: What’s the use of economics? How should we be teaching it to the next generation?

 

Has austerity gone too far?

Moderator: Giancarlo Corsetti (University of Cambridge and CEPR)

Europe has embraced austerity but financial markets still worry about debt sustainability - at least in part due to slow growth that has been associated with fiscal belt-tightening. Is austerity self-defeating? Is it keeping Europeans underemployed for years and thus destroying the medium-run growth needed to pay off the debt? Or are the belt-tighteners wisely steering their nations clear of Greek-like tragedies?

The questions for debate are simple:

  • Should governments let up on austerity now that the global economy is weak but credibility on fiscal sustainability is far from granted?
  • And under what circumstances would be wise to do so?

 

Why do we need a financial sector?

Moderator: Wouter DenHaan (London School of Economics)

This VoxEU debate poses the questions why we need a financial sector and how much should we reasonably pay for it? Whilst some activities in the financial sector are obviously beneficial and should be maintained, others are less clearly so in today's climate. Various proposed regulatory changes will make it more costly and difficult for the financial sector to perform some activities - but is that necessarily a bad thing? If appropriate regulation could serve to curb excesses whilst not affecting the benefits and value added of the sector as a whole then, potentially, resources could be freed up for other more socially useful activities.

The future of EU trade policy

The European Commission has just launched a public consultation on the future direction of EU trade policy. This VoxEU debate, moderated by Richard Baldwin, launches an online discussion of the Commission's proposals.

The first column, by DG Trade's Chief Economist, presents the key elements of the new policy.

 

The Global Crisis

VoxEU.org partnered with the UK government to collect the views of economists from around the world on what should be done to fix the global economy. The analysis and proposals that appeared in the "Global Crisis Debate" fed directly into the UK's preparation for the London summit of world leaders in April 2010. This debate was featured on the UK government's own web site. The debate has six themes:

Macroeconomics, moderated by Philip Lane and featuring lead commentaries that include:
Financial rescue and regulation, moderated by Luigi Zingales and featuring lead commentaries that include:
Open markets, moderated by Richard Baldwin and featuring lead commentaries that include:

 

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Latest Debate Commentaries

  • Promoting employment and structural change in developing countries: A dual mandate for macroeconomic policy managers (Development and the crisis)

    Anis Chowdhury United Nations ESCAP, 18 June 2014

    Iyanatul Islam, Chief, Employment and Labour Market Policies Branch, Employment Policy Department, ILO, Geneva Anis Chowdhury, Director, Macroeconomic Policy and Development Division, UN-ESCAP Introduction The traditional discourse in development economics focussed on issues of underemployment, poverty and structural transformation. However, these issues receded into the background with the...

  • The limits of conventional macroeconomics: Why one needs to focus on structural transformation and inclusive development (Development and the crisis)

    Anis Chowdhury United Nations ESCAP, 21 January 2014

    By Iyanatul Islam (ILO) and Anis Chowdhury (UN-ESCAP)1,2 Conventional macroeconomics as applied to developing economies is part of an overall framework that has a rather narrow conceptualization of economic stability based on certain thresholds: low, single digit inflation (usually less than 5%), fiscal deficits of less than 3% of GDP, debt to GDP ratio of 40% or less, and foreign exchange...

  • An Advisory Paper to Secure Economic Stability, enabling Humanitarian Intervention with an International Mechanism to ensure Peacemaking & Public Security in Regions of Conflict, by Dr Mark Fernando (Development and the crisis)

    Dr Mark Fernando Humanitarian Healthcare, 30 August 2013

      This Advisory Paper is intended to assist in securing economic stability, whilst ensuring that humanitarian interventions can have the very strongest possible impact and are effective, combined with an Economics and Diplomacy Model that can provide for a regionally and internationally acceptable mechanism that can ensure peacemaking is successful in the context of enabling public security...

  • An Advisory Paper to Secure Economic Stability, enabling Humanitarian Intervention with an International Mechanism to ensure Peacemaking & Public Security in Regions of Conflict, by Dr Mark Fernando (Development and the crisis)

    Dr Mark Fernando Humanitarian Healthcare, 30 August 2013

      This Advisory Paper is intended to assist in securing economic stability, whilst ensuring that humanitarian interventions can have the very strongest possible impact and are effective, combined with an Economics and Diplomacy Model that can provide for a regionally and internationally acceptable mechanism that can ensure peacemaking is successful in the context of enabling public security...

  • An Advisory Paper to Secure Economic Stability, enabling Humanitarian Intervention with an International Mechanism to ensure Peacemaking & Public Security in Regions of Conflict, by Dr Mark Fernando (Development and the crisis)

    Dr Mark Fernando Humanitarian Healthcare, 30 August 2013

      This Advisory Paper is intended to assist in securing economic stability, whilst ensuring that humanitarian interventions can have the very strongest possible impact and are effective, combined with an Economics and Diplomacy Model that can provide for a regionally and internationally acceptable mechanism that can ensure peacemaking is successful in the context of enabling public security...

  • An Advisory Paper to Secure Economic Stability, enabling Humanitarian Intervention with an International Mechanism to ensure Peacemaking & Public Security in Regions of Conflict, by Dr Mark Fernando (Development and the crisis)

    Dr Mark Fernando Humanitarian Healthcare, 30 August 2013

      This Advisory Paper is intended to assist in securing economic stability, whilst ensuring that humanitarian interventions can have the very strongest possible impact and are effective, combined with an Economics and Diplomacy Model that can provide for a regionally and internationally acceptable mechanism that can ensure peacemaking is successful in the context of enabling public security...

  • Reaction to Haldane (What’s the use of economics?)

    Simon Wren-Lewis Oxford University, 8 October 2012

    I am, like many, in awe of Bank of England director and economist Andy Haldane. However I did wince a bit at his Lead Commentary for the recent Vox debate on economics (Haldane 2012 ). He looks at the extent economists are to blame for the financial crisis, and he makes two interrelated claims. Having noted that central banks have traditionally been concerned with the “interplay of bank...

  • Fiscal Rules – Help or hindrance? (Development and the crisis, Has austerity gone too far?)

    Anis Chowdhury United Nations ESCAP, 4 October 2012

    Anis Chowdhury (United Nations Economic and Social Commissions for Asia and the Pacific) and Iyanatul Islam (International Labour Organization). A fiscal rule represents legislated and long-term numerical limits on budgetary aggregates pertaining to debts, deficits, expenditures and revenues. In a recent IMF working paper1, Schaechter et al (2012) have reported on a database of fiscal rules...

  • Fiscal Rules – Help or hindrance? (Development and the crisis, Has austerity gone too far?)

    Anis Chowdhury United Nations ESCAP, 4 October 2012

    Anis Chowdhury (United Nations Economic and Social Commissions for Asia and the Pacific) and Iyanatul Islam (International Labour Organization). A fiscal rule represents legislated and long-term numerical limits on budgetary aggregates pertaining to debts, deficits, expenditures and revenues. In a recent IMF working paper1, Schaechter et al (2012) have reported on a database of fiscal rules...

  • Reduce friction or it might break: Lessons for euro members from Latvia's exchange rate and fiscal policies (Has austerity gone too far?)

    Thomas Grennes Department of Economics, North Carolina State University, USA, 29 June 2012

    By Thomas Grennes, North Carolina State University, and Andris Strazds, Nordea Bank Relevance of Latvia's experience to other countries The Latvian government responded to a severe economic shock in 2008 and 2009 by implementing a fiscal austerity program that has received praise from some outside observers and criticism from others. Olivier Blanchard expressed mild approval, but he expressed...