In the US, the negative consequences of increased trade with China, and of globalisation in general, have been associated with a turn towards populism and ultimately the election of Donald Trump as president in November 2016.

The pre-crisis paradigm focused exclusively on the positive role of finance. The new paradigm takes the other side of finance seriously and arrives at distinctly different trade-offs and regulatory approaches.

The first pillar of the old paradigm of carbon pricing is the assumption that an emissions trading scheme is the most cost-efficient way to achieve a certain emission reduction target. However, it has become obvious that the old paradigm is unable to solve a number of challenges, e.g. market...

Of the many good ideas currently being discussed in Europe, the most interesting proposal is to let national unemployment schemes manage the regular business cycle, and to provide European financing to extend the duration of unemployment benefits during a crisis period.

In most countries, mainstream economic policy has not yet undergone any significant change, and there is little consensus on what, if anything, ought to replace it. However, there are some signs of an emerging transition, at several levels.

Over the years, low wage and price increases in Germany amounted to a currency devaluation in real terms against the other eurozone countries and led to a continuous improvement in the German economy’s price competitiveness relative to its fellow eurozone members.

Germany’s social contract, its “social market economy” for the past seven decades, has aimed at spreading wealth and providing a broad social safety net for all groups of society. Yet a defining feature of Germany’s new economy has been the sharp increase in inequality.

Conventional wisdom says that central banks determine interest rate levels. After all, monetary policy set by central banks directly influences money market conditions. But these conditions are also shaped by other actors such as government, manufacturing businesses, commercial banks and...

The European Central Bank has implemented a very ambitious monetary policy since the financial crisis of 2008, intervening heavily in the eurozone economies. This policy has generated substantial risks to both the ECB’s primary task and its independence. It is therefore time for a fundamental...