Monday, December 29, 2008

Two Papers on the Economic Crisis

By economic historian Barry Eichengreen and IMF economists.

Automatic Stabilizers

One reason advanced for the relative modesty of European stimulus programs is the fact that European countries, with their comparatively large welfare states, have built-in automatic stabilizers that ensure an increase in net government expenditures when the economy slows and tax receipts decline. France today announced a third-quarter budget deficit of 15.6 billion euros, which will bring the total debt close to 1.3 trillion euros, or roughly 66.1% of GDP. Next year, the debt is expected to rise to 69.1% of GDP.

Is French Next?

The University of Southern California has closed its German department. Arabic, Hindi, and Chinese are gaining in popularity at the expense of European languages.