A New Hope For Greece And Its Economy

Originally posted on Notayesmanseconomics's Blog:

For the second time in a couple of months voters in an election have delivered a result which has surprised the “experts” and pollsters. In the UK we saw the opinion polls misfire badly but yesterday’s events in Greece saw them in even more disarray. The referendum which was supposed to be neck and neck turned out to be as shown below. From the BBC.

The final result in the referendum, published by the interior ministry, was 61.3% “No”, against 38.7% who voted “Yes”.

Accordingly we are left again wondering as to the value and worth of opinion polls as rather than a close result we saw a decisive one.

Some care is also needed in considering what was decided as it was presented by both Euro area politicians and some sections of the media as a vote on the Euro. This was deliberately misleading as Prime Minister Tsipras was…

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Editorial: Business Ethics

Originally posted on EF Essays:

To fulfill a requirement for continuing professional education (CPE) from the Minnesota Society of CPAs, a few weeks ago I attended an eight-hour ethics seminar. Despite the positive publicity ethics training no-doubt received from the “flashcards” scene in Adam Sandler’s Billy Madison, it’s rarely viewed as an exciting way to spend your time. Despite my initial reservations, I left the conference room that day with a deeper respect for business ethics.

Ethics is a set of moral principles that individuals and groups follow based on their culture, personality, and incentives. When that framework is applied to a corporate setting it’s called business ethics. Perhaps what makes ethics seem uninteresting can be related directly to its definition:  “principles that individuals and groups follow.” When it comes to ethics, at first glance, it appears like you don’t make a decision; instead, you’re guided to one by an invisible current of “culture…

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Economists Krugman and Stiglitz on Why Greeks Should Vote ‘No’ on the Referendum

Originally posted on Jo Weber Economist & Social Media Expert:

  An anti-austerity march in front of the Greek Parliament in Athens. (Ggia/ CC BY-SA 3.0)

Now that Greece has become the first advanced nation to fall into arrears with the International Monetary Fund, the nation has reached a crucial crossroads: Should it concede to the demands of the “troika” — the institutions representing creditor interests—or continue to reject austerity and prepare to ditch the euro?

Amid mass protests, tumbling markets and bank closures, Greece will hold a referendum Sunday to decide.

Recent opinion pieces by Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman maintain that Greece must keep going it alone and vote no.

Stiglitz writes in The Guardian “… the economics behind the programme that the ‘troika’ (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the…

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The euro sucks

Originally posted on LARS P. SYLL:

So, having pushed us hard to accept substantial new austerity, in the form of absurdly large primary surpluses (3.5% of GDP over the medium term) … we ended up having to make recessionary trade-offs between, on the one hand, higher taxes/charges in an economy where those who pay their dues pay through the nose and, on the other, reductions in pensions/benefits in a society already devastated by massive cuts in basic income support for the multiplying needy …

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Unfortunately, the institutions’ response was to insist on even more recessionary measures … and, worse still, on shifting the burden massively from business to the weakest members of society (e.g. to reduce the lowest of pensions, to remove support for farmers, to postpone ad infinitum legislation that offers some protection to badly exploited workers).

The institutions new proposals … would make a politically problematic package – from the perspective of our Parliament…

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Mainly Macro

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Market Power versus Price-taking in Economic Growth – http://wp.me/p5Ozy3-bH

A Concise Introduction to Policy Responses to Europe’s fundamental economic challenges

Originally posted on Miguel Costa Matos:

This short essay was written as my submission towards the 1989 Generation Initiative, which will take place in London on the 26th June. I will be participating in the Economic Affairs roundtable alongside Nobel economist Christopher Pissarides, author and former economic adviser to the EU Philippe Legrain and others.

* * *

In this essay, I will discuss what economic policy reforms the EU should prioritise to respond to its fundamental economic challenges. I believe these two fundamental challenges to be the crisis of secular stagnation (de Grauwe, Summers) and the crisis of public finances.

The latter crisis involves two sub-challenges. The first is to deal with debt legacy. When the crisis started, total Eurozone debt stood at 80%. At the end of 2013, it was 95% and 5 countries have debt over 100%. As Paris and Wyplosz note in their MADRE plan, this means that the sovereign debt crisis…

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