In our Atlas der Weltwirtschaft 2022/2023 we included a special section dealing with the countries in Eastern Europe that are members of the EU and in some cases even members of EMU. Some of these countries have recorded enormous losses in international competitiveness over the past two decades, as can be seen from the real effective exchange rate of their currencies. A scenario of this kind is now looming again.
Eastern Europe facing a new crisis weiterlesenSchlagwort: ECB
„Prediction is very difficult, especially if it’s about the future.“
Whoever this bon mot is attributed to, it makes one smile and takes the heat out of a debate that should be about the matter at hand and not about dogmatism. Predicting economic development in times as turbulent as the present is indeed a delicate business for anyone who dares to do it. But since assessments of the future development of a country’s or continent’s economy are important for forward-looking economic policy, it is precisely then that the quality of forecasts on which decision-makers rely must be closely scrutinised.
„Prediction is very difficult, especially if it’s about the future.“ weiterlesenThe ECB gambles away its credibility
In contrast to the nine previous hikes, the European Central Bank’s (ECB) decision to raise key interest rates by 0.25 percentage points on 14 September 2023 was no longer unanimous in the ECB’s Governing Council but, according to ECB President Christine Lagarde, only approved by a „solid“ majority. The public response is also no longer as unanimous as before. Some experts, such as the President of the German Institute for Economic Research (DIW) Marcel Fratzscher, emphasise the risk that the ECB is taking with this step regarding the economic development in the Eurozone. Markus Demary, an expert at the Institute of the German Economy (IW), which is close to employers, criticises the decision more or less directly: „The ECB has chosen to take inflationary pressure out of the economy and is accepting a recession for the sake of price level stability“.
The ECB gambles away its credibility weiterlesenFalling energy prices at the producer and consumer level – what should feed continued inflation?
The President of the Deutsche Bundesbank, Joachim Nagel, said in a speech in Frankfurt on 5 July 2023 that it was too early to sound the all-clear with regard to the price development in Germany, „Inflation has broadened overall.“ And he adds: „According to our June projection, the inflation rate in Germany will remain high for the time being. The ECB’s June projection for the euro area gives a similar result.“
Falling energy prices at the producer and consumer level – what should feed continued inflation? weiterlesen