Some thoughts on macroeconomic models

By: Paul De Grauwe, K.U. Leuven and CEPS

The limits of DSGE models as tools of analysis for central banks.

Time to stop forecasting, and to start thinking

By: Wolfgang Münchau

Forecasts that Obama will win the presidency, and that inflation is falling have in common that they mean nothing at all.

Germany expects less than minus 3 per cent growth

Economics ministry sees a catastrophic fall in economic output next year, giving impetus to a new stimulus programme; German government sources put the headline number at over €20bn, consisting mostly of structural measures (i.e. not much help for 2009 slump); Sarkozy plans a new aid package for the car industry tied to commitments to keep production in France; Dominique Strauss-Kahn forecasts a global recession, and a fall in Chinese growth to 5%, a level at which employment is shrinking fast; the euro, meanwhile, is rising and rising.

Central banks must care about asset prices

By: Wolfgang Münchau

The IMF is right to say that asset price matter for monetary policy. But the IMF is wrong to claim that this would be consistent with inflation targeting.

Why the euro will soon replace the dollar as the world's reserve currency

By: Wolfgang Münchau

The predominance of the dollar as the global reserve currency is bound to end in any case. The credit crisis will greatly accelerate that process.

Ten reasons to leave the euro-dollar exchange rate alone

By: Eurointelligence ECB Watch

We have been hearing a lot of anguished comment about the euro-dollar exchange rate. Here are ten reasons why we should leave the euro/dollar exchange rate alone.

Ben's depression

By: Wolfgang Münchau

A return to a monetary policy to stabilise prices ended the Great Depression in the 1930s. This time it will work the other way round. Once the Fed is forced back onto a path of price stability, our depression will begin.