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Paul De Grauwe

  • Dinsdag 1/12/2020
    Paul De Grauwe

    The market system is subject to limits that have to do with externalities, inequalities and excessive market concentration. These can only be taken care of by government action. But governments are also subject to limits in their capacity to act. In my book “The Limits of the market” I analyze the nature of these limits and how they can be overcome.

     

  • Vrijdag 17/4/2020
    Paul De Grauwe

    It appears that the objective of the internationalization of the Renminbi (requiring convertibility) and the authoritarian credit allocation mechanism within China conflict with each other. If China pursues its ambition to make the Renminbi an international currency the authorities will have to abandon their ambition to control the domestic allocation of credit. It is unclear today how the Chinese authorities wish to resolve this conflict. It seems to me that they are more likely to continue to pursue domestic financial control. As a result, it is unlikely that the Renminbi will challenge the dollar as an international currency soon. I also conclude that the future clash between the dollar and the Renminbi is not something to be expecting soon.

  • Vrijdag 17/4/2020
    Paul De Grauwe

    Sooner or later, the ECB must accept that monetary financing in support of deficit spending is a necessity not just for mitigating the Corona crisis, but also for averting a downward deflationary cycle that could pull the Eurozone apart. It is time to think outside the box and to set aside dogmas that may be appropriate in normal times but not when we face an existential crisis.