China devalued its currency by 3%. Financial markets responded disproportionately, but we explain that it is quite understandable, given government policies in the rich countries.
We then investigate the devaluation’s effect on the US and EU financial markets as well as on the currencies of emerging markets.
Publications
A new study from a German economics institute claims that the German state has already made €100bn from the Greek crisis as lenders flee from Greece into the safe haven…
Each employed Slovak worker will pay about a week’s take-home pay in extra taxes so that their government can bribe Jaguar into creating a few jobs located in Slovakia (for a while). We present lessons this teaches us, one for each day of such week.
Economists are often accused (especially by other disciplines) of exaggerating the virtues of the market and of systematically downplaying the chances of a successful government intervention. In this view, economists are “market believers” and “state sceptics”, which is then reflected not only in research, but also in teaching and policy advice.
It is true that economists deal with the causes and consequences of state failure more intensively than other social scientists. Economic analysis of government failure has become an important research program over the course of the second half of 20th century.
Nevertheless, the label of unilateral market orthodoxy does not really stick. A look at the ngram statistic (courtesy of Google’s digitization project) reveals that the term “market failure” appears in the literature much more frequently than “government failure”. Given the prominent role played by the state in our economic system, it is apt to ask: Why is government failure so little discussed?
The imagination of EU governments to come up with new kinds of tax is apparently inexhaustible. Tax on meat is now being prepared, as an answer to alleged “problems” with meat production and consumption. But taxes are generally bad solutions to “problems”, especially when those problems are created by other government activities.
It’s not just USA who is raising minimum wages significantly. New or increased minimum wages are spreading all across the EU, too (e.g. Germany, UK, Portugal..). If we take McDonald’s as a symbol of “minimum wage jobs”, which governments are working the hardest to deprive such workers of any job at all?
If it wasn’t obvious already, Greeks do their taxes differently.. They rely more than is customary in OECD on the less visible taxes of VAT and Social Security. Income tax revenue (from people and companies) is much less prominent. If they are risking a lot less, it time to try to actually lower the income tax rate?
New retail tax in Hungary discriminates big business, which just happens to coincide with the finance minister’s nationalistic interest. New retail tax in Czechia favours big business, which just happens to coincide with the finance minister’s business interest. Curious thing, Coincidence…
You’ve heard of Bitcoin. Is it primarily a currency or a service? Its users probably could not care less; for many it will be both. Yet a distinction is necessary.…
Two recent stories from Greece reveal very different treatments of Germans paying taxes in Greece – depending on whether they are people or corporations.
