The European Central Bank (ECB) plan to lower the official interest rate from 0.15% to 0.05% will not work. What’s the difference between 0.05% and 0.15%? Nothing. There will be no increase in requests or approvals for loans resulting from this 0.1% cut. In July 2012, after lowering the interest rates from 1% to 0.75%, Mario […]
On Principles and Taboos
Major financial crises have always left huge amounts of debt in their wake, followed by incidents of nonpayment. Occasionally the reduction of debt has been concealed, as in the case of Germany, which, thanks to an annual inflation that averaged 17% from 1913 to 1950, reduced the value of its domestic debt to almost zero. […]
Don’t Trust What Economists Tell You
Because we economists tend to view reality through the lens of economic models, but I did enjoy one of John H. Cochrane’s comments in his blog “Macro debates, the oped.” For quite some time now, due to the recent crisis, I have been experiencing a lot of hesitation about these model-filtered visions. Cochrane, a University […]
Rethinking Welfare State
What is the welfare state? Highway robbery? A necessary evil? A good idea? All three perspectives are out there and deserve addressing …
Is Spanish Government reformism delivering?
Does the current economic policy in Spain help or impede the recovery and medium and long-run growth prospects? Together with a group of eight IESE experts and six of some of the most prominent Spanish economists, we have developed the Reform Monitor, an assessment of the performance of the Spanish economy; the adequacy of the […]
