last upadate: 07/11/2018       

Below, you find a list of my latest publications.
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But, before you do anything, you might wish to read my brief comment on the Italian affairs:


It is completely clear: when a country – moreover with an advanced economy – suffers from stagnation, it needs more investment to revive growth. Such a country is Italy. Its economy has not yet overcome the fallout of the global financial crisis and the spillovers from the following euro debt crisis in peripheral euro countries Greece, Spain and Portugal: In 2017, its real gross domestic product (gdp) was at 95 % of the year 2007, and public debt increased from 100 % of the gross domestic product to more than 130 % in 2017, and the level of gross fixed capital formation (‘investment’) was at 78 % compared to 2007. Italy has become the main victim of the new specifications of the stability and growth pact introduced in 2012, which toughens up the fiscal adjustment path for all countries with a debt-gdp ratio higher than 60 %. In recent years, the Italian finance ministers cut public investment and fiscal incentives for private investment. And the result demonstrated that this truly neoliberal policy was not only without any positive effect, it even deteriorated the growth prospects.


In such a recessive situation is the reduction of the fiscal deficit from forecasted 1.7 % of the gdp in 2018 to 0.8 % in 2019– requested by the EU Commission and accepted by the former government - a program of complete madness in terms of economics. Such a reduction would strengthen the depressive forces in the third-largest EU economy with negative spillovers to the entire EU economy. Frankly spoken, it is a program for causing irreparable damage to the EU. Hence, an increase in the fiscal deficit is needed to lead the Italian economy out of recession and stagnation. The new government has correctly decided for a higher deficit of 2.4 % of gdp in 2019.  


That such a necessary correction is planned by a government that is basically hostile to the EU, is a bitter experience, but does not change its economic appropriateness. It is the consequence of the inability of democratic and EU friendly parties to do the job. Indeed, their inability stems from the self-binding rules in the EU that replaces common sense by technocratic procedures. These procedures follow the neoliberal idea of rule-based monetary and fiscal policies in all circumstances, unfortunately introduced by Germany.  Now, there are only two options for escaping from that wrong policy paradigm: The first one is a simple abolition of the entire stability and growth pact and leaving any verdict on the policy of a government to the financial markets. Observers will be surprised how these markets and large investors are able to differentiate.  Country risk analysts are not so ignorant to neglect the positive growth effects of fiscal deficits. There is no automatism that Italy would lose all its access to these financial markets like Greece. The second option, which is the better one, is to re-reform the stability and growth pact and eliminate the relevance of the 60 % debt limit for fiscal policies. But this needs to be complemented by a fiscal backstop on EU level for those countries that have lost access to private finance. With an abundant scientific literature at hand, there is not effectively a lack of knowledge, but rather of political implementation. It is time that at least one country sets the starting impulse for necessary institutional changes. In this case: Italy.

(Posted: 2th October 2018)

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For participants of the 8th annual National Bank of Poland conference, Warsaw 26th October 2018: download my paper here.

Latest publications:

Winter 2018: ‘A fire department for the Euro area: reflections on a fiscal risk-sharing capacity’. MPRA Working paper No. 83965, January 2018. Free download https://mpra.ub.uni-muenchen.de/83965/

Autumn 2017:'Monetary policy independence reconsidered: evidence from six non-euro members of the European Union'. Empirica, 44(3), 567-584, Euro 41,94. Download info: https://link.springer.com/article/10.1007/s10663-016-9337-3?wt_mc=Internal.Event.1.SEM.ArticleAuthorAssignedToIssue

Summer 2017: ‘Explaining trade imbalances, in the euro area: Liquidity preference and the role of finances’ PSL Quarterly Review, vol. 70, n. 280 (June 2017), 155-184Free download: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/

The Big 2013-2016 Balkan Project: 

'Improving Competitiveness in the Balkan Region – Opportunities and Limits' WIIW-Research Report No. 411. Download via WIIW website:  http://www.wiiw.ac.at/.   

                This report is the English Version of:

‘Steigerung der Wettbewerbsfähigkeit in der Balkanregion – Möglichkeiten und Grenzen‘. (with Doris Hanzl-Weiss, Mario Holzner, Michael Landesmann, Johannes Pöschl and Hermine Vidovic. wiiw Research Report in German language No. 3, Dezember 2015 , 217 pages including 27 Table and 110 Figures. Download: http://wiiw.ac.at/steigerung-der-wettbewerbsfaehigkeit-in-der-balkanregion--moeglichkeiten-und-grenzen-p-3755.html