Was macht nachhaltige Staatsfinanzen wirklich aus? @steffenmurau.bsky.social und @moritzkapff.bsky.social wissen weiter 👇

Brad of course agrees Important point as German industrial production drops to 2005 levels. I can think of no better way for the German government to spend money than a few billion on EV demand subsidies Beats all the other spending outlays I’ve seen hands down - it’s Germanys key industry u know

It is a pretty dire indictment on the quality of German policy-making if we blast billions on stay-at-home subsidies and gastronomy tax cuts. And do nothing for our most important industry bringing in 90bn in tax receipts, other than killing the ICE phaseout cuz we want to stay in the 20th century

"China is the only large country driving the energy transition at anything close to the necessary speed and scale." It's also the only one whose energy transition is not hamstrung by reliance on the motive force of renewables profitability. Coincidence? I think not.

Energy sector advantage by continent 2/

Not sure that some in Germany understood that more issuance of their own would imply more market discipline on France. Not sure some in France fully realised that Germany's big fiscal experiment also has sharp downsides for them.

beantrage vier monate sabbatical um meinem lesestapel hinterherzukommen

CBI is legitimised by 2 arguments. Progressives should defend 1 and keep fighting against 2. 1. Classic separations of powers. The king should not held the purse directly 2. The inflation nutter credibility argument (k&p77,b&g82,rogoff85) whereby the cb plays a discipline role against labor demands

NEW: The first evidence of a solar take-off in Africa☀️✈️ x33 rise in Algeria solar panel imports in the 12 mths to June 2025, compared to previous 12 mths. x8 in Zambia x7 in Botswana x6 in Sudan x3 in each of Liberia, DRC, Benin, Angola, Ethiopia 🧵

None of this is to say the US tariffs won’t hurt European exports — they will. Europe had legit cause to retaliate now. But I doubt a militarily more independent future Europe has the will, impetus and import-competition concern to reopen a broad trade war on the US. 6/

The whole China green manufacturing thing is understood - I think? - as a key factor in the energy complex, geopolitics, and climate. People have heard of the Pakistan story; where a quarter of electricity is now solar compared to >10% in 2023. But, like: things keep happening!

Die EZB hat dafür kein gutes Werkzeug: Laufen lassen ist sozialer Sprengstoff. Mit dem Zinshammer draufhauen bremst die ganze Wirtschaft und löst das grundsätzliche Problem nicht. dezernatzukunft.org/en/der-zinsh...

Im September erscheint ein von @huhnholz.bsky.social, @aaronsahr.bsky.social und Eva Weiler herausgegebener Sonderband zur Politischen Theorie öffentlicher Finanzen. Es geht darum, ökonomische, geldpolitische und fiskalische Fragen endlich wieder zum Gegenstand politischen Denkens zu machen.

Ha-Joon Chang on the neglect of climate and the environment in today's economics degree @financialtimes.com www.ft.com/content/9aab...

Ganz eindrücklich, in diesen Tagen sein Fahrrad in der Werkstatt zu haben: Man ist urplötzlich aufgeschmissen in Berlin, wo es immer wunderbar ging mit Nextbike. Wie einsam ist Berlin jetzt unter Metropolen mit Anspruch auf Welt- oder wenigstens Westgeltung ohne taugliches Leihradsystem?

Schattenhaushalte sind keine Ausnahme, sondern seit Jahrzehnten fester Bestandteil der Staatsfinanzen. Sie spiegeln die deutsche Geschichte.

Schattenhaushalte sind keine Ausnahme, sondern seit Jahrzehnten fester Bestandteil der Staatsfinanzen. Sie spiegeln die deutsche Geschichte, schreiben @steffenmurau.bsky.social und Moritz Kapff.

they need to just spend one day in shanghai and that problem would be solved

🚨 Out now: Die dritte Surplus-Ausgabe »Wir kümmern uns« ist da. Neoliberale schaffen einen Staat, der die Menschen allein lässt. Doch es braucht gemeinsame Fürsorge. In den nächsten Tagen im Briefkasten, am Kiosk oder sofort online auf: 👉 www.surplusmagazin.de/surplus-3-wi...

Very happy to see that the article @moritzecon.bsky.social and I have written on Germany's "fiscal ecosystem" has just been published online and in print in Surplus Magazine www.surplusmagazin.de/staat-schatt...

Striking back hard at MAGA's Miran/Bessent plans, @steffenmurau.bsky.social and I propose a SUERF User's guide for euro internationalisation (based on our recent JEPP article) www.suerf.org/publications...

Might start referring to myself as having been 'radicalised by the macro intelligentsia'.

We propose a typology organized around 1. the scale of green public spending 2. the degree of discipline imposed on private capital: This yields four green macrofinancial regimes:

Really great piece by @katie0martin.ft.com on our recent euro internationalisation paper, rightly concluding that fear of "industrial amounts of arguing" remains the EU's biggest obstacle www.ft.com/content/16e7...

Droughts could wipe out nearly 15 per cent of economic output in the Eurozone, the European Central Bank has warned. Via @kenzabryan.ft.com. www.ft.com/content/2b19...

Here's a couple, from various pieces of research with @elisabettaco.bsky.social, @johnspringford.bsky.social and Brad Setser, that I've been sharing at conferences: Clean technology exports already account for 4% of Germany's GDP, a figure unmatched by any other G7 country or even China. 2/

🚨 New open access article 🚨 Out now in Journal of Financial Regulation with Alex Goghie and Matteo Giordano 'Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity' academic.oup.com/jfr/advance-...

Nils' point is accurate. The math is simple: no, even with Germany doing its part, Europe can't fill the gap left by fading US demand. The US accounts for ~50% of global trade deficits. DEU's expected trade surplus decline will provide incremental demand to the global economy similar to FRA.

Dear WSJ Editorial Board, your April 25th piece on Germany's energy transition fundamentally misunderstands both renewable energy systems and modern grid architecture. Your "hostage to weather" narrative misses the mark. 1/

The key chart right now: Usually US economic pain is cushioned by falling bond yields and a strengthening dollar, which mean lower interest rates and more spending power for consumers. This time we’re seeing the opposite, meaning the pain will be amplified.

If it weren't for the tariffs, this would be one of the biggest stories right now.

The only electricity generating capacity in the American pipeline is renewable.

For veterans of the Eurozone crisis, this is quite incredible - today Greece has a lower borrowing cost than both the UK and the US for their 10 year bonds. I had to check, all of the previous so called 'PIIGS' (Portugal, Ireland, Italy, Greece, Spain) have lower borrowing costs than the US today.

This was the situation just before the Trump whack-em-all tariffs. China's exports were exploding, eurozone exports were declining, US was flat-ish. Even with Germany's big fiscal (and mind the lag...), Europe simply doesn't have the demand to absorb China's massive goods trade surplus.

The best thing EU diplomats can achieve now: a) signal to China that a massive devaluation of the CNY would lead to EU retaliation - don't do it. b) to pressure Beijing to lift consumption using the fiscal space in the central budget. c) call the IMF for help on advice/coordination.

Tbh, this is how US policy makers always felt. Earlier you could at least tell the specific interests they were advancing (typically large US corporations and banks). Today they are hurting everybody, at home and abroad.

Research seminar on Money and Payments: Evolution or Revolution? with Jörg Bibow next week at @hertieschool.bsky.social in cooperation with Global Climate Forum. Organized by @steffenmurau.bsky.social and Monica DiLeo. Registration (optional): globalclimateforum.org/2025/04/01/money-and-payments/

🚨 Not an April Fools' joke! 🚨 OBFA-TRANSFORM is now on YouTube! Our first video? A deep dive into Steffen Murau’s PhD thesis on private money with Gerhardt Kaltenherberg—serious content, no pranks. As DoP & Editor, I made sure it looks as good as the theory sounds. 🎥 youtu.be/YaMGfMB2FMc

Looking at the US dollar decline and market reactions, the real headache for European exporters might not be the direct hit from higher tariffs—but the ripple effects of a real US recession.

But @nilsredeker.bsky.social is right. The US is an important source of end demand for global exports: the tariffs and a possible U.S. recession will still hurt. Some demand-stoking policies elsewhere will help. Germany and the ECB can lead the way (but watch demand black hole China).

Actually a great point by the FT about the current (probably too hawkish monetary and fiscal policy). Why trying to keep expenditures always low isn’t „unideological“ & sound policy and why we shouldn‘t over-regulate democratically elected politicians.

Some European central banking and supervisory officials are questioning whether they can still rely on the US Federal Reserve to provide dollar funding in times of market stress, casting some doubt over what has been a bedrock of financial stability reut.rs/4bUsaGl

TIL (aus: www.sueddeutsche.de/kultur/norwe...)

Germany now has the right fiscal policy to stoke domestic demand and offset lost export markets from the second China shock - as Brad Setser and I argued. But to prevent China from deindustrialising Germany, this must be flanked by industrial and trade policy. 1/

"If we can't do for free what everyone else would be fined billions of dollars for, then we don't have a business model."

🔎 The Big Picture Deutschland braucht dringend Mittel für #Dekarbonisierung. Das geplante #Sondervermögen und die Ausnahme für die #Bundeswehr lassen Fragen zur #Klimafinanzierung offen.

(aus: economist.com/graphic-deta...)

Dass Schwarz-Rot Schulden in Größenordnung von Hunderten Milliarden für unausweichlich, zwingend notwendig hält, scheint offensichtlich. Nur Weg, Form und genaue Höhe sind offen. Da das nun auch die Union so sieht, muss man festhalten, dass die Ampel mit Lindner im BMF nie eine Chance hatte.

This is the crux of the matter in this excellent column by @gideonrachman.bsky.social. You either have to believe, with little to no evidence, that team Trump is playing 4D geopolitical chess. Or take the obvious signals that this US may want to carve up the world with Russia and China.

The interaction of potential large scale issuance of safe Euro-denominated government backed defence bonds and creeping questioning of the role of US Treasuries in global finance is going to be fascinating to watch.