Volatility and reforms: The overlooked virtues of economic uncertainty

Written on December 23rd, 2015 in politics Comments Off

… for any change, know better how it works … Published on VOX (CEPR’s political portal), by Alessandra Bonfiglioli and Gino Gancia, Dec 19, 2015.

The Great Recession highlighted the prominent role that economic uncertainty plays in hindering investment and growth. This column provides new evidence that economic uncertainty can actually play a positive role by promoting the implementation of structural reforms with long-run benefits. The effect appears to be strongest for countries with poorly informed voters. These findings suggest that times of uncertainty may present an opportunity to implement reforms that would otherwise not be passed.  

Does economic uncertainty promote or impede the adoption of structural reforms? This question arises when jointly considering two issues that became particularly relevant during the Great Recession. On the one hand, the rise in macroeconomic volatility in recent years has stimulated a new literature on how uncertainty impacts economic activities and private investment decisions (see Bloom 2009, 2011, 2011a, 2014). On the other hand, the Crisis has also revealed the need for structural reforms … //

… Conclusions:

analysis has unveiled a strong positive effect of uncertainty on the intensity of structural reforms, which seems to be more pronounced in countries with poorer information about policy action. These results are important in at least two respects. First, they suggest that times of market turmoil, which are characterised by a high degree of uncertainty, may provide an opportunity to implement reforms that would otherwise not pass. Second, if the myopic bias is indeed driven by poor information, as hinted by our last findings, it would imply that promoting transparency, guaranteeing media independence, and educating voters are important factors to make democracies work well.

(full text, references).

Links:

Ankara must come clean & address mounting evidence of links with ISIS – Iraqi MP to RT, Dec 22, 2015;

Video: Podemos Breaks Two-Party System in Spain, 12.06 min, on The Real News, by essica Desvarieux, Dec 21, 2015: ROAR Editor Carlos Delclos explains how Podemos has lead the call for structural change but will ultimately be limited in getting results;

Anger in Delhi as Supreme Court rules against extending gang rapist’s sentence, on RT, Dec 21, 2015;

Flowers from Guantanamo, on Dissident Voice, by Kathy Kelly, Dec 21, 2015;

Avoiding confrontations: French, Russian defense ministers agree on anti-ISIS coordination, on RT, Dec 21, 2015;

New Zealand – Child Health: Small effort can make a big difference – Nicola Young, on Wanganui hronicle, by Nicola Young, Dec 20, 2015: MORE bad news with our increasing child poverty stats released this week by the Children’s Commissioner Dr Russell Wills. And is the worse news that we are getting sick of hearing about it?

FRANCE: Aquitaine region to conduct unconditional minimum income pilot, on BIEN, by Nicole Teke, Dec 20, 2015;

Pour le centenaire de l’indépendance de la Finlande, des Norvégiens veulent offrir une montagne à leurs voisins, dans atlantico.fr, le 19 déc 2015: il faudrait pour cela déplacer d’environ 200 mètres la frontière entre les deux pays;

Putin: RT is free to ‘have fun’, it’s not controlled by Kremlin as some of you might have thought, 3.13 min, uploaded by Russia Insider, Dec 16, 2015;

US: Corporate Media Ignore Economic Justice in the 2016 Election, on truthout.org, by The Daily Take Team, Dec 16, 2015;

Interview with Turkish Author Elif Shafak – We’ve Forgotten How to Laugh, on Spiegel Online International, by Juliane von Mittelstaedt and Christoph Scheuermann, Dec 10, 2015: Turkish author Elif Shafak sees her country as a “wobbly democracy,” increasingly authoritarian, polarized and depressed. And she is disappointed by European silence;

Engineering Abundance – Molly Jahn, 18.47 min, uploaded by Science and History Hub, Dec 14, 2015;

Critical thinking should be taught in schools, on New Internationalist.org, by Mischa Wilmers, Dec 9, 2015;

Chris Hedges, Cornel West, and Richard Wolff Discuss Thomas Paine, 82.59 min, uploaded by Science and History Hub, Dec 2, 2015 … about the importance of Thomas Paine and his most influential works: Common Sense, The Rights of Man, and The Age of Reason. This event was part of Left Forum, a progressive conference held annually in New York City;

… an assortment of clips … out of tons of audios and videos of Prof Wolff: Economist Richard D Wolff in St Petesburg/Florida, Nov 2015, 70.52 min, uploaded by Leonard Schmiege, Nov 11, 2015 … (see also: The Economics of Colonialism, Britain and Kenya, 1870–1930, by Wolff Richard D Wolff, in American Political Science Review, Issue 01/March 1976, pp 271-271 – and see on en.wikipedia: Chris Hedges, Cornel West, Richard D. Wolff, Thomas Paine, Workers’ control);

YouTube channels: DayInTheLifeOfRTB; Positive Money; EvolutionReport; goldfranke; RathausCafe; queuepolitely; Julian Assange Cyber Defense; 5iF3R; Simon Dixon’s Banking Reform; Russia Today RT; Russia Insider; RT America; where to watch; RT on air; The Big Picture RT; antikriegTV; wwwKenFMde; Deutschland+Russland; WissensmanufakturNET; uncutnews.ch;

… and this:

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