by Erik Jones

Europe and the Choice between Drift and Mastery

The President of the European Commission hosted an event to mark the one-year anniversary of the report on European competitiveness drafted by former Italian Prime Minister and European Central Bank President Mario Draghi last September. The message coming out of that meeting both from the European Commission President and from Draghi was that European policymakers need to do their homework. Too many items from the Draghi agenda remain unimplemented or only partly addressed. Too much more needs to be accomplished. And time is of the essence. The world is only becoming more volatile, more uncertain, and more dangerous. Europeans cannot afford to wait in preparing for this changed geopolitical environment, otherwise they will suffer the consequences. ‘Europe’ may even fail as a political project.

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by Erik Jones

Three Perspectives on the Crisis of Democracy in Europe

The usual story about the crisis of democracy centres on populists and other bad actors who spoiled the party for the all the rest. There is some truth to this account. But it only captures a small part of what is happening. To get a full picture, you need to look at the failure of democrats and democracy to deliver on what was promised. You also need to consider the perverse incentives that democratic institutions create. And you have to imagine that there are important groups of people – many of whom are poor and disadvantaged – who come out better under other systems of government (and for whom democratization has made things worse). These perspectives on the crisis of democracy do not deny the great promise that democratic institutions have to offer. But they do give pause to consider the many different challenges that democrats have to face if the project of giving power to the people is going to be a success. Three recent books by Philipp Ther, Zsuzsanna Szelényi, and John A. Gould explain why.

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by Erik Jones

Europe Today — A Twenty-First Century Introduction (Sixth Edition)

European politics is changing, and fast. But the significance of that change is hard to appreciate without a deep understanding of ‘Europe’, meaning its history, politics, culture, and economics. Unfortunately, so much of what we ‘know’ about Europe is based on caricatures and stereotypes. (The same is no doubt true for the rest of the world as well. I blame the demise of area studies, but that is another conversation.) This edited volume — called Europe Today and published by Rowman & Littlefield — can help shed important light.

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by Erik Jones

Five Examples of the Strength of Area Studies

Universities do not like to study people who live in places anymore. Instead, they emphasize the importance of theory and method. There are many good reasons for doing so, particularly as you consider the wide range of skills involved in analyzing the enormous amounts of data that the internet makes available. But there are also costs. Theory is a relatively poor guide for understanding why Russia invaded Ukraine, for example. You can make arguments from theory after the fact, but a close examination of developments in the country offered a better chance for anticipating what Russia did and where we are likely to go from here. The first book in this collection is a good illustration of what I mean with that statement. That book was published just weeks before the Russian invasion. The insights it offers on the war as it is unfolding are compelling.

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by Erik Jones

The Italian Presidential Elections and the Politics of Trust

The Italian electoral college will start voting for the successor to Sergio Mattarella as President of the Republic on 24 January. Between now and then, at least two pages of every major national newspaper will be devoted to rumours and speculation about what Italy’s party leaders are planning, who might get drafted as a candidate, and how the votes are likely to line up. It is the usual blizzard of noise that comes at the end of the white semester — the last six months of any presidential mandate, during which the President of the Republic is no longer able to dissolve parliament. What is at stake is not just who will take over the leadership of the Italian state but also whether the current government can hold together and whether the any new President will send Italy’s parliamentarians back to face the voters. By implication, Italy’s successful implementation of its national recovery and resilience plan is also on the table — together with all that entails for the rest of the European Union.

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by Erik Jones

Three Perspectives on Money, Finance, and Central Banking

Last autumn I reviewed three books that highlighted different perspectives on money, finance, and central banking that deserve closer attention. 

In the first book, Gottfried Leibbrandt  and Natasha de Teran point out that the main reason to have money is to make payments – which means that when you start to change the payments system, you wind up changing just about everything connected to money.  That ‘wallet’ on your cell phone is only the tip of the iceberg.

In the second book, Fabio Mattioli explains that when we talk about finance, we are primarily talking about forward looking contracts – and those contracts are only as good as their enforcement.  By implication, a financialized economy looks very different when politicians start deciding which contracts will be honoured and which will not.  Any debate about ‘rule of law’ goes to the heart of the financial economy.

In the third book, Willem Buiter reminds us that the central bank is a public asset owned by the national state. If national governments accounted for that asset in their balance sheets, they would uncover important revenue streams that could stimulate the economy and reduced burdens on taxpayers.  The ‘helicopter money’ that policymakers talked about both during the global economic and financial crisis and at the start of the pandemic is not as strange or uncommon as you might think.

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by Erik Jones

Choice and Division in Joe Biden’s America

The election of Joseph R. Biden, Jr., as the 46th President of the United States creates an important opportunity to change American politics and the transatlantic relationship. In his acceptance speech to the nation, the President-Elect argued that ‘the refusal of Democrats and Republicans to cooperate with one another is … a decision. It’s a choice we make. And if we decide not to cooperate, we can also decide to cooperate.’

Making that choice to cooperate will not be easy for either side. The differences between the constituencies that the two major U.S. political parties represent are structural. Bringing them together will involve important concessions. Moreover, those concessions will not be equal because the differences across American society are not evenly balanced. Worse, trust is lacking — which means no one is eager to make the first concession. Biden may lead, but neither Democrats nor Republicans are likely to follow without a clear vision of where they should be headed and a strong incentive to go there.

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by Erik Jones

From Narrative to Crisis: The Future of Economic Thought

Three recent books explore important changes in the way we understand the economy. Robert Shiller focuses on the need to bring in ‘narratives’ that circulate within the economy or that can be borrowed from other disciplines; Thomas Philippon asks why America gave up on free markets and looks again the importance of regulation in relation to market competition; and James Gerber examines the influence of financial crises and the lessons we learn in their aftermath. Together these books tell us a lot about where economic thinking is headed. The novel coronavirus pandemic has done little to change the direction of travel and much to accelerate the pace.

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by Erik Jones

Why We Need More Diverse Central Bankers

US Federal Reserve Chairman Jerome ‘Jay’ Powell opened a window on the central bank’s new monetary-policy strategy in August 2020 by stressing that he was focused on the Fed’s ‘core constituency, the American people’. A few days later, the Dutch central-bank governor, Klaas Knot, gave a speech in Amsterdam to underscore that the job of the central-banking community is ‘to manage the risks that normal people have to face’. This was no coincidence. Both men were responding to a call made in 2019 by the Australian central-bank governor Philip Lowe for monetary policymakers to ‘talk in stories people can connect with’. If former Fed chair Alan Greenspan could once pride himself on being incomprehensible, that time is over. Central bankers need to be understood – and quickly.

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by Erik Jones

The Coming Disruption of Higher Education

I went back into the classroom in the third week of September to greet a very enthusiastic group of MA students from across the globe.  Many of them were in the classroom.  We are one of the very few parts of Johns Hopkins universe that is teaching in person.  Many of the students were also on Zoom.  We started class in the evening in Italy; my American students were straddling lunch time; my students in China were burning the late-night oil.  The experience of being with them was a breath of fresh air after a long time at home.  If you ignored the masks, the social distancing, and the ban on any kind of organized celebration, it almost felt like things might possibly be returning to normal – almost, but not quite.  And I doubt they ever will.

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