Essays & News

  Amid ongoing economic and security problems, far-right political outsider Javier Milei won the most votes in Argentina’s open presidential primaries on August 13. The libertarian who pledged to dollarize the economy, close the central bank, radically cut government spending and privatize state-run companies is now the front-runner in the October 22 elections. Whether he or a candidate from one of […]

Thousands of Africans and other migrants are stranded in Lampedusa. Italian and European Union institutions appear helpless. What can be done? President Emmanuel Macron of France responded swiftly by tightening French-Italian border controls to prevent migrants from entering French territory. Such actions seem hypocritical, given that Mr. Macron endlessly speaks of European solidarity and often […]

  For more than three years now, all the basic rules of budgetary responsibility in the European Union have been effectively switched off. In March 2020, at the beginning of the Covid-19 pandemic, the EU activated the so-called general escape clause from the application of budgetary rules. But let us not be fooled. It has […]

A big and embarrassing challenge to DSGE models (Dynamic Stochastic General Equilibrium) is Alex Tabarrok’s latest post at Marginal Revolution. Tabarrok comments on a paper that finds two problems with new-Keynesian DSGE modeling. One is that this model/technique cannot predict real-world data very well. Put differently, when we ask DSGE not to forecast but to […]

Fifteen years of stringent regulatory requirements and gloomy macroeconomic conditions have taken a toll on bank profitability, especially in Europe. But lately, a new wave of optimism is spreading over the global banking sector. At first glance, bankers have at least one good reason to be cheerful again. Since July 2022, the European Central Bank lifted interest […]