@lugaricano.bsky.social: You cannot win a trade war against the army that protects you. Our weakness is Russia. With a threatening Russia on our doorstep, and the Ukraine war ongoing, Europe cannot afford any break with the US www.siliconcontinent.com/p/the-turnbe...

”time to admit QE's later rounds were clear policy errors”

Today in SiliconContinent, Klaus Masuch and I explain carefully the redistribution of risks that are an inevitable consequence of modern monetary policy (QE etc.) and the huge transfers of wealth that have in fact taken place as a result. www.siliconcontinent.com/p/the-hidden...

This turns the single market on its head, it's exactly what people like @lugaricano.bsky.social‬ have been talking about, when they say that the modern EC is failing at its raison d'être, where the economy is concerned. Enforcing a single market. www.siliconcontinent.com/p/the-myth-...

I have a new book! Digital Platform Regulation. Fun analysis of what society should do to get some competition out of of our favorite gatekeeper platform. Relevant to the DMA and US antitrust remedies. And free! Download here: som.yale.edu/centers/thur...

As long term rates increase, the problems that created the doom loop in Europe are unsolved. Why? Italy's politicians like to have a captive buyer of debt. And German politicians like to control €2.5 trillion through local Sparkassen. My post today: www.siliconcontinent.com/p/the-return...

I explain today why the Single market is broken: mutual recognition is not what we think it is; harmonisation actually fragments, and the Commission is not doing its core job. If you only ever read one post of Silicon Continent, let it be this one. www.siliconcontinent.com/p/the-myth-o...

How to pay for European defense - a nice review of our @bruegel.bsky.social report with @steinbacharmin.bsky.social and @jzettelmeyer.bsky.social by @lugaricano.bsky.social www.siliconcontinent.com/p/how-to-pay...

Ukraine is the test case. "If the bloc fails to act decisively, it risks remaining caught between a dysfunctional confederation and the 'ever closer union' it hopes to become." @lugaricano.bsky.social @politico.eu www.politico.eu/article/hung...

This blog post by @pietergaricano.bsky.social while ostensibly about education makes crucial points about the limits of European policies, which are specially relevant as we think of industrial policy. www.siliconcontinent.com/p/policies-w...

Europe’s economy is in trouble. Our Professor of Public Policy @lugaricano.bsky.social recently featured on the @economist.com podcast “Money Talks” to discuss the challenges facing Europe’s leaders today. 🇪🇺🎧 www.economist.com/podcasts/202...

open.substack.com/pub/siliconc... Excellent piece by @lugaricano.bsky.social

@lugaricano.bsky.social @hooverinstitution.bsky.social www.linkedin.com/posts/mattab...

Esplèndid text de @lugaricano.bsky.social sobre el concepte "externalitats sobre la seguretat nacional" i com aquest concepte pot ajudar a comprendre (i a actuar) els canvis sobre comerç internacional, proteccionisme i subvencions a la producció nacional 1/2 www.siliconcontinent.com/p/trading-wi...

"Trading with Buliles" How to think like an economist in a world of hard power. - The national security externality - Strategic sectors - When integration encances resilience. Including fascinating new work on Geoeconomics (Maggiori, Becko, Kooi) www.siliconcontinent.com/p/trading-wi...

Good point by Martin, which i missed at the time. Sorry.

Ukraine needs to join the European Union as fast as possible. Neither Trump nor Putin can veto this! ANDREW DUFF advocates for the fast-track accession and calls for a revision of its terms and conditions: verfassungsblog.de/fast-trackin...

COVID ripped apart economies around the world. Amazingly most rich countries snapped back almost completely very quickly. By the end of 2021, 12 of 27 advanced OECD economies had unemployment rates below pre-COVID forecasts. The US did not. In fact, it was the fourth worst. A 🧵

Our leader on #Merz and the debt brake. Get rid of it, and do it now. www.economist.com/leaders/2025...

This Draghi piece is a quiet indictment on the @EUCommission's failure on its core Treaty mandate: "establishing the internal market" & ensuring "free movement of goods, persons, services and capital." His facts are devastating. A thread summarizing them and drawing some consequences. 1/

If you thought @jasonfurman.bsky.social 's FA piece was too subtle in its distinction between "tradeoff" as a well-defined economic concept and its common usage, you might get the point with this amazing post on the SuperBonus by @lugaricano.bsky.social. www.siliconcontinent.com/p/how-to-inc...

I guess it isn't to everyone. But the fact of the matter is that not only Germany is rapidly losing export markets to China, but Europe at large. China's exports are growing at a 10% y-o-y clip, world trade around 3%, eurozone exports are languishing (and yes that also hits CEE by extension). 4/x

Fantàstic @lugaricano.bsky.social sobre política fiscal i monetària europea i, en definitiva, sobre una Unió que és poc més, encara, que un club d'estats que van per lliure. (l'estudi del cas italià és simplement esgarrifós) www.siliconcontinent.com/p/how-to-inc...

Today in Silicon Continent, the astonishing story of a "stimulus" gone wrong-- the 220 billion Italian superbonus. The ideas and the political economy of why it took off, and why it was unstoppable. www.siliconcontinent.com/p/how-to-inc...

Not long ago, defending the huge responsibility of Universities to honor the bottom-up process of truth seeking...not shortcircuit debate and declare what is right would have provoked outrage. A beautiful speech by UChicago President Alivisatos. news.uchicago.edu/story/chicag...

Ten Principles for a New Climate Policy By @lugaricano.bsky.social www.siliconcontinent.com/p/ten-princi...

Policies that superficially sound "progressive" but damage their stated beneficiaries (like greens sabotage of transmission and nuclear; or Nimbys on housing): eliminating testing reduced the chances of underprivileged students.

The Deep Seek R1 news is huge. 1000x cheaper to train ($5m!!), open source, RL based. Huge implications for value creation and capture. It is all over Twitter and MSM. My timeline here has no mention. Is this my fault? Who should I be following for cutting edge tech here?

the findings are fascinating, but it's also a masterclass of thread explaining a new paper 💯

Anyone who thinks that when businesses complain about a competition regulator, siding with the businesses is to be growth-friendly, makes a huge mistake. Competition is good for growth AND disliked by businesses (who must work harder to do well). Wanting to make businesses happy will lower growth.

@lugaricano.bsky.social entrevistado en Letras Libres. “El gran momento de éxito de los mercados, de las liberaciones económicas, llega hasta 2008. La izquierda y la derecha veían las cosas de una manera muy parecida: había que combinar un mercado potente con un Estado redistributivo”

The gloves are finally off, a month before the German election, as Green party frustration with Scholz’s ever-nebulous Ukraine stance boils over www.ft.com/content/1b59...

My quick response to the new @sandertordoir.bsky.social/Setser brief -Ok to more data, targeted trade measures. -No to increased "enshittification" of the Single Market to deliver local content. -No to a defensive industrial policy. Invest in the future! www.siliconcontinent.com/p/the-second...

Now, of course, it is a problem that we do not have a well-built theory which integrates both arguments.

I think that the argument for the price system relies both on Hayek 1945 and the Walras-Arrow-Debreu general equilibrium theory. I would be of no use to aggregate dispersed information if the resulting allocation was inefficient.

I would like to point out that thinking along these lines does have some policy consequences. For instance, set a market price for carbon emission; do not burden firms with reporting requirements on their emissions. The market efficiently does the aggregation for you.

Considering packaging this line and calling it a policy degree: "prices are wily and mostly not under your control, and will often make a mockery of your neat welfare objective"

And my gloss on Shengwu's position is "any allocative externality you want to mitigate, microeconomics lets you worry about" To which Luis's reply is basically "Yes but your attempts of that form will still usually be worse than the price system (Hayek 45)"

So my take is not that "prices are great and should be left alone" but "prices are wily and mostly not under your control, and will often make a mockery of your neat welfare objective."

I think a limitation in thinking about redistributive market design at least as important as Luis's criticism is -- "When you take into account changes in prices the designer doesn't control, where is the ultimate welfare incidence of your market design activities?"

The discussion ending at this tweet is very smart on both sides ( @lugaricano.bsky.social and @shengwuli.bsky.social ), reasonably spicy, and fun to read.

After producing a valuable report documenting the microeconomic obstacles to the EUs growth, Draghi is choosing to focus his activity on his macro recommendation- more debt. In SiliconContinent today I argue that we must focus on the micro, not the macro. www.siliconcontinent.com/p/focus-on-t...

A global relationship recession: across the world, the drop in fertility is linked to a significant drop in the number of couples in a stable relationship. E.g.: South Korea down from 58% 25-34 yo cohabiting to 23%. Outstanding data story @jburnmurdoch.bsky.social on.ft.com/4fWosfH

@lugaricano.bsky.social Wearing your Silicon Continent hat I thought you might be interested in this research on the challenges and opportunities for the RNA industry in Europe.

The Wire is a fantastic guide to how incentives work. And it shows *why* incentives get broken. Institutions get stuck down stupid measures even if most people know they are stupid.

Fields of "inquiry" where asking simple factual, yes/no, questions is considered worth an expulsion from campus. In case these mobsters care about facts, the factual answer to the question is yes: LLMs are now able to ace the exams in most fields of knowledge. @arpitrage.blusky.social

This is wisdom on a webpage. Read it

Powerful letter by two Israeli economics professors asking questions about the conduct of the war that can be answered but are not being answered.

My Christmas post in Silicon Continent is about economics lessons from The Wire- with implications for green washing and AI benchmarks- as well as a bit of career advice for young readers. I hope you enjoy it! www.siliconcontinent.com/p/you-get-wh...

Germany may turn out to be, after all these decades of lessons and condescension, one of the worst-run countries in Europe.