My job guarantee proposal for Austria’s long-term unemployed

Here are the slides and paper from my presentation at the New Economic Thinking conference in November 2018 (German only):

Titel: Eine Jobgarantie für Österreichs Langzeitarbeitslose
English title: A job guarantee for the long-term unemployed in Austria



Edit: The links have been adjusted to the second, updated version of the slides and paper from May 2019.

Germany’s current account surplus

Enno Schröder and I have just published a paper in World Economy:

We use data from the World Input‐Output Database to fit a closed multiregional input–output model in order to estimate the size of spillover effects of Germany’s final demand on GDP, employment and the trade balance in Southern European countries. We find that spillover effects are rather small. Germany alone will hardly make a significant contribution to the external adjustment process in the European South.

Two working papers on spillover effects

Where does a German demand expansion dissipate to? Does it reach the countries that need it most in Europe (Italy, Spain, Greece, Portugal)?
Hosted on the website of the IMKLink

How much could a coordinated European policy that includes a demand expansion of countries with a current account surplus contribute to an upswing in the Southern European nations?
Hosted on the website of the IMKLink



Can a member state of the Euro Area regain control over the value of their government bonds through a public bank?

I wrote this paper just before the ECB announced its Quantitative Easing program. Due to the political quarrels between Member States, the ECB was late to saving the Euro Area and late to the QE-party that followed and drove up asset prices.

From the point of view of an individual Member State of the Euro Area, the question arises what it can do in case of a speculative attack against its government bonds when the central bank is unwilling to guarantee the value of the country’s government bonds? This situation is special to the Euro Area where Member States‘ central bank are unable to conduct sovereign monetary policy. With an unwilling or even politically hostile joint central bank, how much leeway does an individual Member State have during or on the eve of a speculative attack against its government bonds?

I explore a specific aspect of this question, namely the option of founding a public bank in such a Member State. This bank has access to ECB financing (just like a regular bank) and may use it to refinance governments bonds and thus influence their price to limit a collapse in their value. While the system could work in principle, there is a caveat. The rules governing the constitution of the ECB lead to the unavoidable fact that the ECB always has the last say about money creation in the Eurozone. Nevertheless, a slight change of the rules could enable a productive financing system for governments that is more restrictive and better targeted than the current quantitative easing.