Martin Wolf Fish and folly in Cameron’s European project

January 24, 2013 12:23 pm by Martin Wolf

(AP)

The future of the UK in the EU is, of course, already a subject of fierce debate. Everybody can see that the chances of a British departure have increased. The question is by how much.

I was interested to discover from a private conversation with a very senior continental official that his worry is that the rest of the EU really does not need this diversion of attention from its immediate concern, which is the reform of the eurozone.

He referred to two specific risks.

First, he is worried that the very fact that the UK may be on the way out will shake confidence in the future of the eurozone. As he noted, people in Asia or the Americas do not understand the details. They will just regard this British decision as calling into question the vitality of the European project, partly, no doubt, because the UK has deep relations with these parts of the world. Read more

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Posted in Britain, Davos |

Martin Wolf The world can stop panicking – for the moment

January 24, 2013 9:51 am by Martin Wolf

The financial panics are over. Now we must deal with the longer-term aftermath.

I advanced this thesis at a private dinner last night and, to my surprise, Nouriel Roubini agreed with me. More precisely, he agreed that “tail risk” had been sharply reduced.

The big change of the last 12 months has, of course, been in the eurozone. This has something to do with policy improvements in vulnerable countries, particularly Italy and Spain. It has even more to do with the willingness of the European Central Bank, under the redoubtable Mario Draghi, to use its power to reduce break-up risk and offer potentially unlimited liquidity to banks and sovereigns under stress. Read more

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Posted in Davos, Global economy |

Martin Wolf What future for economics?

January 26, 2012 11:28 am by Martin Wolf

Yesterday, I moderated a panel on “The Future of Economics”. The panel included two Nobel laureates in economics – Peter Diamond of the Massachusetts Institute of Technology and Joe Stiglitz of Columbia. (For pedants, this is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.) It also had Robert Shiller of Yale and Brian Arthur of the Santa Fe Institute. So it would be fair to say that the panel was packed.

Three of the participants are definitely of the so-called saltwater school of economics (sceptics of the efficiency of markets in all circumstances who live on the US coasts). Professor Arthur is even more heterodox than they: he is interested in the impact of technology and increasing returns. It would have been wonderful, however, also to have had a fully committed member of the “markets are always right unless governments mess them up” freshwater school, associated particularly with the University of Chicago.

It is impossible to summarise all of such a rich discussion. But here are some of the highlights.

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Posted in Foreign affairs |

Martin Wolf Bankers’ confidence makes me quite nervous

January 28, 2011 4:29 pm by Martin Wolf

Mood. The improvement in optimism at Davos is palpable from last year, as I argued before. Interestingly, the group showing the greatest caution seems to be the CEOs of non-financial corporates. My experience over the years is that these people are a lagging indicator. What drives them is their recent performance. However, there seems to me to be a real return of confidence among bankers, who are back in force. That does make me quite nervous. Read more

Posted in Davos, Foreign affairs |

Martin Wolf The world economy: Has the optimism returned?

January 26, 2011 7:20 pm by Martin Wolf

I have, as usual, succeeded in spending a day in Davos without attending a single public session. But I have managed to speak to several interesting people about the world economy. Read more

Posted in Davos |