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After the Soviet Union collapsed in 1991, Americans were quick to give much of the credit to the economic system of the West. The centralization and monopolization of the Soviet regime, so the thinking went, had stifled enterprise, choked creativity, and stripped wealth from vital systems. The magic formula? Democracy combined with open and competitive ...

The curtain has been pulled aside on the once secret world of tax havens, and the scale of abuse is nearly beyond reckoning. Week after week, Americans and Europeans worn down by budget austerity have learnt about the secret accounts of their politicians, tax evasion by leading companies and hot money destabilising the world economy. ...

The big talk in Washington, DC this month is the sequester. These cuts account for roughly 8% of most discretionary spending, both military and domestic. While the cuts became effective at the start of March, many will first begin to feel the pinch this month, since government contracts generally require 30 days’ notice for leaves or ...

In the election of 1952 my father voted for Dwight Eisenhower. When I asked him why he explained that “FDR’s debt” was still burdening the economy — and that I and my children and my grandchildren would be paying it down for as long as we lived. I was only six years old and had ...

If you have studied economics at the university level in the last 35 years it is likely you were introduced to the concept of “asymmetrical information” and George Akerlof’s famous 1970 article on markets for “lemons” (American slang for an automobile of terrible quality). The Nobel committee that awards the prize in economics singled out ...

The ongoing weakness of America’s economy—where deleveraging in the private and public sectors continues apace—has led to stubbornly high unemployment and sub-par growth. The effects of fiscal austerity—a sharp rise in taxes and a sharp fall in government spending since the beginning of the year—are undermining economic performance even more. Indeed, recent data has effectively ...

To anyone who lived through Ronald Reagan’s presidency, it’s a familiar story. It begins with a detailed description of a woman living high off the hog on welfare. Then it asserts that runaway social spending poses a threat to economic growth and well-being. The up-close-and-personal touch makes a more memorable case for austerity than an ...

The best advice I received when taking up policymaking responsibilities in Turkey more than a decade ago was to take “a lot of time and care to develop and communicate the ‘narrative’ to support the policy program that you want to succeed.” The more that economic policy is subject to public debate – that is, ...

The debate over government debt and its relationship to economic growth is at the forefront of policy debates across the industrialized world. The role of the economics profession in shaping the debate has always come under scrutiny. In particular, attention has focused on the findings of the Harvard economists Carmen M. Reinhart and Kenneth S. ...

It’s been a very bad week for the merchants of austerity. In Europe, the just-released statistics on first quarter performance show EU nations sliding deeper into recession. In Spain and Greece, unemployment rates are approaching a staggering 30 percent. In Britain, the Tory government took as good news the fact that the UK managed to ...