(Too) Expensive Prescription Drugs

June 10, 2016

As is well-known, longevity increases throughout the world. This is mainly due to the advance of medical technology, which also includes prescription drugs. Now, this is an interesting category from an economic point of view. Given that drugs can make the difference between alive or dead or, somewhat less extreme, a life without too much Read more

Viva El Niño!

May 13, 2016

Ethiopia, El Niño-influenced drought continues to affect millions of people, deepening food insecurity, malnutrition and water shortages in affected areas. [..] It is projected that in 2016, 2.2 million children under age 5 and pregnant/breastfeeding mothers will be moderately malnourished and 450,000 children will be severely malnourished (UN-OCHA, 13 April 2016). A major problem of Read more

Helicopter Money

April1, 2016

The world is changing. After the financial crisis of 2007/2008, economic growth was supposed to recover, but it did not. Central banks all over the world cut interest rates sharply to just above zero percent. It did not help either. Then, quantitative easing was invented: if the standard recipe does not work, why not try Read more

Interest Rates Are Low, So Let Us Reduce Them!

March 4, 2016

Economic growth does not get into gear yet. Declining prices for oil and materials have hindered economic growth. Consequently, official forecasters have reduced their growth expectations for the current year. Parallel to this, inflationary expectations tilted downwards. Eurostat even reported a deflation of 0.2 percent in the month of February. Mario Draghi, the President of Read more

Secular Stagnation

February 5, 2016

We thought the crisis was fading out. We thought we had suppressed a financial crisis, a global economic crisis, a debt crisis and a Eurozone crisis. After all, economic growth rates were starting to increase, world trade starting to recover and unemployment rates starting to fall. But November 2013 Lawrence Summers made it very clear Read more

When Robots Meet Piketty

January 8, 2016

Why not think about robotics? The topic is hot (witness these five recent studies: ). It is also the time of the year to look ahead. And, probably the most compelling reason, the topic is fascinating, multifaceted and potentially revolutionary, not only by adding things that yet don’t exist, but also by changing various aspects Read more

Fiscal austerity revisited

December 4, 2016

Have the Eurozone’s fiscal policies failed? Have they been fooled by models that were out of date? The recent note by researchers Möhlmann and Suyker is only two and a half page long. Still, it got a lot of attention in the Dutch newspapers. Why? Let us go back to 2013. The economic crisis in Read more

A tax on economic growth

November 6, 2015

446 million euro. That is what the Netherlands has to pay extra to the European Union because Dutch Gross Domestic Product (GDP) turned out to be higher than earlier estimated. This is the consequence of a clear and fair rule. Every EU country finances the EU budget with an amount that is proportional with its GDP. If the estimate of a country’s GDP is then revised upward, that country should pay more. To be sure, the Dutch don’t have to be afraid that next year’s 5 billion tax reduction will be withdrawn. Finance minister Dijsselbloem had already anticipated that Brussels would be calling and set some money apart. Read more

Will early retirement revive?

October 2, 2015

Just when it seemed the debate on pensions would never end.. This summer, the secretary of state Klijnsma unfolded her plans regarding the future of the Dutch pension scheme to the Second Chamber. With a clear sketch of the adjustments to the current pension scheme and the contours of the new scheme. More transparency, more simplicity, more variety, more freedom of choice, a better coverage (think of the self-employed) and, last but not least, abolishing the financing principle of frontloaded pension contributions. Read more

Five good reasons for a Grexit

July 11, 2015

What can one add to the Grexit discussion? Little to none, it seems, given the numerous and varying comments of experts and opinion leaders on the possible exit of Greece from the Eurozone. Well, there may be one thing. A Grexit will imply serious economic damage, to Greece and to other countries, but will also have benefits. Not so many that we should welcome a Grexit, but sufficiently so to question the thinking that a Grexit may be the end of the world or the EU or the euro. Read more

I’ll take them all

June 8, 2015

The debate about Dutch pensions has taken a new route. A few years ago the debate centred around the question whether workers of retirees should pay for the shocks that are inherent to a funded system. Now the big question is how to introduce more freedom of choice without sacrificing solidarity. Freedom of choice is currently very limited when it comes to pensions. Read more

What determines economic growth?

May 4, 2015

Ask someone what should be the number one question of macroeconomics. Chances are high that the answer concerns economic growth: what causes economic growth, can government policies adjust it, and can we count on it staying with us for, say, the next hundred years? But, quite surprisingly, economic science has not been able thus far Read more

Freezing cold interest rates

April 7, 2015

Which temperature would characterise best current interest rates? Certainly not one that feels as comfortably warm. Current interest rates are so low that one would not expect people to put any money on their saving accounts. Probably, it is the low transaction costs due to the ICT revolution or something like that which explains why Read more

Useful illusions – money, debt and debt restructuring

March 2, 2015

The homo economicus cannot be cheated. The fictive person that economic science gave birth to is averse to illusions. Instead, for each decision to make the homo economicus weighs all alternative options and selects without exception that option that is considered the best. Read more

Europe and the euro

February 16, 2015

There was a time that ‘Europe’ occupied a little spot in the middle of the newspapers. How this has changed in the last few decades! Now, ‘Europe’ is almost everywhere. Whether it is monetary policies, public debt policies or trade policies, Europe is involved. Read more

Ed Westerhout