Money market on strike

By: Casper de Vries (Erasmus University Rotterdam) and Jon Danielsson (LSE)

A proposal on how to address information asymmetry.

The case against a Grand Coalition in 2009

By: Wolfgang Münchau

Forget all this hogwash about the responsibility of the cenrtre. Grand coalitions are undemocratic.

Why the European Debate on Competitiveness is going nowhere

Raising competitiveness has been the prime goal of economic policy in Europe. But is it a sensible goal? Those who favour a competitiveness-based approach often make false analogies between enterprises and countries. Countries do not compete in the way companies do. Trade among countries is not about profit but about the division of labour. It can benefit all by raising productivity. A more meaningful concept of competitiveness at the national level defines a competitive country as one that can maintain high rates of growth and employment in the medium term. This concept focuses on the country’s ability to provide its citizens with high and rising standards of living in the medium and long run.

Two transatlantic policy lessons for crisis management

This crisis holds two transatlantic lessons. The first, from Sweden, is that governments should recapitalise some, but not all, failing banks. The second is that you need to have a policy in place, and not rely on ad-hoc rescues. This is the euro area's specific problem.

Debunking the Paulson plan

The Paulson plan raises more questions than it provides answers. This is not just about whether it works, but about its long-term economic effects, the impact on growth, and the future solvency of the US.

Sarkozy's economics is not working

Sarkozy has miscalculated the budget deficit issue. Politically France is losing influence, and economically, he has now insufficient room for manoeuvre to confront the economic downturn.

Two scenarios for the financial crisis

There are two ways this crisis can development. The financial system will experience a systemic hit, or inflation might rebound. There are circumstances where both can happen.