Read on Twitter
Former Commissioner & austerian-in-chief Olli Rehn's Keynesian turn is remarkable indeed
https://www.ft.com/content/05a12645-ceb2-4cd5-938e-974b778e16e0
I think Finland's (forced) shift from foreign to domestic sources of growth could offer some clues
It also highlights that austerity needs *external enablers*
https://twitter.com/paulkrugman/status/1391360507014168577
https://www.ft.com/content/05a12645-ceb2-4cd5-938e-974b778e16e0
I think Finland's (forced) shift from foreign to domestic sources of growth could offer some clues
It also highlights that austerity needs *external enablers*
https://twitter.com/paulkrugman/status/1391360507014168577
As the euro crisis hit & austerity squeezed demand throughout Europe, the only option to grow AND keep austerity was to rely on partners outside of Europe
This is what Germany did: rely on Chinese & US spending & refuse rebalancing
https://www.socialeurope.eu/german-rebalancing-out-of-exit-options
This is what Germany did: rely on Chinese & US spending & refuse rebalancing
https://www.socialeurope.eu/german-rebalancing-out-of-exit-options
Finland's misfortune was that
their export champion company Nokia died
their main partner outside Europe was Russia (slapped by trade sanctions)
Deprived of enablers, they were forced to rebalance & spend more at home, a highly atypical path in the Eurozone
their export champion company Nokia died their main partner outside Europe was Russia (slapped by trade sanctions)Deprived of enablers, they were forced to rebalance & spend more at home, a highly atypical path in the Eurozone
A lesson of Finland's trajectory could be that austerity is not a viable option if there are no trading partners on the other side 'enabling' it. (And this may help explain the shift in Finnish macro policy)
See @M_C_Klein & @michaelxpettis for more https://yalebooks.yale.edu/book/9780300244175/trade-wars-are-class-wars
See @M_C_Klein & @michaelxpettis for more https://yalebooks.yale.edu/book/9780300244175/trade-wars-are-class-wars
The argument is explored in my first thesis paper
Comments very welcome
https://palmapolyak.weebly.com/research.html
Comments very welcome
https://palmapolyak.weebly.com/research.html
... a reminder about Rehn's formerly austerian views https://twitter.com/DanielaGabor/status/1125303377104113664
https://twitter.com/DanielaGabor/status/1125303377104113664
... and more on the politics of rebalancing in the Eurozone by @stefwalter__ @ariray_ & @niredeker https://global.oup.com/academic/product/the-politics-of-bad-options-9780198857020?cc=ch&lang=en&
https://global.oup.com/academic/product/the-politics-of-bad-options-9780198857020?cc=ch&lang=en&
