Greece’s Economy: Resurgent, but Still Fragile

Describing the Greek economy these days as a phoenix ascendant from the ashes of crisis is, given the country involved, an apt metaphor. Yet it may be too early to mythologise the Greek economy. Fast money has done well investing in Greece, but the stickier long-term investors that Greece so desperately needs remain sceptical. Until the fundamentals improve, this phoenix still has one wing tied down. Click here for my latest column in the Financial Times.

Agents of Change: the Economics and Politics of Reforms

I had the great pleasure to teach a course on structural reforms and sovereign debt crisis at the European University Institute near Florence, Italy on Sep 16-17. My partners in crime were George Papaconstantinou (the Greek finance minister when Greece was pushed into its first bailout), Bob Traa (former IMF senior representative in Greece) and Nicola Giammarioli (Secretary General of the ESM).

The course covered the economics behind structural reforms and sovereign debt crises, how to design a reform programme, how to rehaul government budgets and how to devise multiannual budgets. First hand examples were sprinkled throughout, with the teachers representing a bailout country (Greece), the institutions (IMF and ESM) and the markets.

A million thanks to George Papaconstantinou for organizing the course and inviting us to take part!

Consumers cannot carry the US economy for ever

They don’t call us dismal scientists for nothing. Nearly 75 per cent of economists surveyed in July by the National Association for Business Economics see a US recession by the end of 2021. But ask for data supporting that forecast and you get no real consensus. There are plenty of theories about trade wars. US growth has slowed. But the usual bubbles and imbalances that trigger recession aren’t yet evident. With consumption accounting for nearly 70 per cent of growth, a recession has to be transmitted through the US consumer. See my latest in the Financial Times for what that might look like.

What’s driving stock market volatility?

Stock market volatility—big swings in the prices of stocks—had actually been relatively low in the period of recovery from the financial crisis through 2017. However, that trend has been changing of late, with several incidences of volatility marked by ‘short, sharp hurricanes,’ rather than the ‘longer storms’ of the past. I discuss some of the changes in technology and financial regulation that contribute to recent volatility alongside Michael Klein, Executive Editor, EconoFact in this video.

(If you aren’t familiar with EconoFact, you need to be! EconoFact’s mission is to provide even-handed analyses of timely economic policy issues drawing on data, historical experience and well-regarded economic frameworks. With an incredible network of academics writing fact-based memos, the goal is to help combat fake news. In full disclosure I’m on the advisory board, but they are doing really interesting stuff.)