April 18th, 2012
10:58 PM ET

Down with debt weight

Editor's Note: Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University.  For more from Skidelsky, visit Project Syndicate or follow it on Facebook and Twitter.

By Robert SkidelskyProject Syndicate

Nearly four years after the start of the global financial crisis, many are wondering why economic recovery is taking so long. Indeed, its sluggishness has confounded even the experts. According to the International Monetary Fund, the world economy should have grown by 4.4% in 2011, and should grow by 4.5% in 2012. In fact, the latest figures from the World Bank indicate that growth reached just 2.7% in 2011, and will slow this year to 2.5% – a figure that may well need to be revised downwards.

There are two possible reasons for the discrepancy between forecast and outcome. Either the damage caused by the financial crisis was more serious than people realized, or the economic medicine prescribed was less efficacious than policymakers believed. FULL POST

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Topics: Economy • Global
December 20th, 2011
09:59 AM ET

The euro in a shrinking zone

Editor's Note: Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University.  For more from Skidelsky, visit Project Syndicate or follow it on Facebook and Twitter.

By Robert SkidelskyProject Syndicate

The recent European Union summit was a disaster. Both Britain and Germany played the wrong game: British Prime Minister David Cameron isolated Britain from Europe, while German Chancellor Angela Merkel isolated the eurozone from reality.

Had Cameron brought an economic-growth agenda to the summit, he would have been fighting for something real, and would not have lacked allies. As it was, he fully accepted Merkel’s austerity agenda – which his own government is implementing independently – and chose to veto proposals for a new European treaty to protect the City of London. This cheered up the Euroskeptics in Cameron’s Conservative Party, but it offered nothing to counter the lethal medicine prescribed by Germany’s Iron Lady.

The agreement reached in Brussels forecloses any possibility of Keynesian demand management to fight recession. “Structural” budget deficits would be limited to 0.5% of GDP, with (as yet undisclosed) penalties for violators.

This is the wrong cure for the eurozone crisis. The Merkel doctrine holds that the crisis is the result of government profligacy, so only a “hard” balanced-budget rule can prevent such crises from recurring. FULL POST

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Topics: Economy • Europe
The Keynes-Hayek rematch
Economist John Maynard Keynes.
August 19th, 2011
11:28 AM ET

The Keynes-Hayek rematch

Editor's Note: Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University.

By Robert Skidelsky, Project Syndicate

The Austrian economist Friedrich von Hayek, who died in 1992 at the age of 93, once remarked that to have the last word requires only outliving your opponents. His great good fortune was to outlive Keynes by almost 50 years, and thus to claim a posthumous victory over a rival who had savaged him intellectually while he was alive.

Hayek’s apotheosis came in the 1980’s, when British Prime Minister Margaret Thatcher took to quoting from The Road to Serfdom (1944), his classic attack on central planning. But in economics there are never any final verdicts. While Hayek’s defense of the market system against the gross inefficiency of central planning won increasing assent, Keynes’s view that market systems require continuous stabilization lingered on in finance ministries and central banks. FULL POST

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Topics: Economy
A novel solution to unemployment: "Work-sharing"
Hundreds of job seekers line up to enter a career fair December 8, 2009 in Denver, Colorado. (Getty Images)
May 20th, 2011
10:30 AM ET

A novel solution to unemployment: "Work-sharing"

Editor's Note: Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University. For more from Skidelsky, visit Project Syndicate or follow it on Facebook and Twitter.

By Robert SkidelskyProject Syndicate

As the world recovers from the Great Recession, it has become increasingly difficult to discern the true trend of events. On the one hand, we measure recovery by our success in regaining pre-recession levels of growth, output, and employment. On the other hand, there is a disquieting sense that today’s “new normal” may be slower growth and higher levels of unemployment.

So the challenge now is to formulate policies to provide work for all who want it in economies that, as currently organized, may not be able to do so. This issue is much more acute in developed than in developing countries, though interdependence makes it, to some extent, a common problem. FULL POST

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Topics: Economy • Europe • Global • Ideas