Covid and the nature of capitalism by Philippe Aghion, Helene Maghin, André Sapir published by VOXEU (6/2020)
“The COVID-19 pandemic has shed light on the structural dichotomy between the models of capitalism operating in Europe and the US; the former offers better protection for its citizens while the latter shows greater economic dynamism. This column argues that for all the harm COVID-19 has caused, the crisis has also provided an opening to rethink the versions of capitalism practised on both sides of the Atlantic. Some degree of convergence towards a better model is desirable, the authors suggest, and perhaps even possible.”
The macroeconomic effects of automation and the role of COVID-19 in reinforcing their dynamics by David Bloom, Klaus Prettner published by VOXEU (6/2020)
“Over the last decade there has been a tremendous progress in automation. Many tasks previously seen as un-automatable can now be performed without human labour, and the number of industrial robots in use has increased sharply. This column describes the recent trends in automation and argues that its principal effects are to increase output per capita at the expense of rising inequality. Advancing technologies have mainly replaced the routine tasks of low-skilled workers, while the incomes robots generate flow to wealthier capital owners. The current COVID-19 pandemic is likely to reinforce these trends, raising the need for a policy response.”
Money and debt: Paying for the crisis by Jean-Pierre Landau published by VOXEU (6/2020).
“The simultaneous increase in public debt and central banks’ balance sheets in advanced economies results in important policy trade-offs. In effect, the ‘monetisation’ of government debts by central banks transforms current credit and funding risks into future inflation risk. Low interest rate and inflation rate create a conducive policy space for financing exceptional public expenditures in response to the COVID-19 shock. This column argues that, in the presence of very low and stable inflation expectations, this is an optimal policy mix. To be sustainable, the perspective of fiscal dominance must be eliminated and central banks’ independence must be respected and reinforced.”
