Political Economy

It is not being widely discussed, but we suspect the wage settlement in Germany over the weekend is an important development. The agreement that covers 765k state government workers in Germany, represented by Verdi, reached a two-year deal…

A key issue that will be addressed this week is how will the ECB respond to the electoral outcome of Italy.

UMKC Economics head Stephanie Kelton was on Chris Hayes' show to talk about US fiscal politics along with three other guests. They discuss the political gridlock in the US and what it means for the economy.

A reader of our blog here at Credit Writedowns recently wrote to me, detailing why Italians voted as they did in the recent general election. Her view speaks more to a rejection of corporatism and corruption than austerity.

France had pinned its hope that threat to EMU would be turned back before the wolf came it its door. The Italian political tensions come at the poor time for France. Its ability to absorb shocks is terribly constrained. Recall what has…

The situation needless to say is very fluid and although the euro has stabilized, the threat to euro area stability is clearly evident in the debt markets where Italy's 10-year yields has soared 32 bp and the spread over Germany has widened…

The best chances of balancing a strong government with a reform agenda also looks the most likely. It is the center-left winning the Chamber of Deputies and then forming a coalition with Monti's centrists to secure a majority in the…

The focus on currency wars distracts from other and arguably more important issues. Much of coverage of the G20 statement focused on the foreign exchange market, but has missed what is likely an even more important story. The G20 have…

In the links this morning, I linked to a Handelsblatt interview with the head of Austria's social democratic EU parliamentarians. The overall gist of his comments were that he believed the EU budget was 'catastrophic' because it was in…

My thesis these past few years is that a fiscal retrenchment to reduce deficits in the US was likely to lead to a shortened business cycle. I have been saying since 2013 began that politics favoured the United States going into austerity…