The massive, unprecedent fiscal and monetary stimulus undertaken by almost all governments and central banks in the last two years has prevented the 2008-2009 recession from turning into a second Great Depression. Policymakers and economists did not forecast the crisis, but they have been able so far to take it under control. So we should at least rejoice; the great depression of the 1930’s was not anticipated as well, but it was because of subsequent mistakes by authorities that it became so great!

This said, the current picture is not bright at all. GDP in many countries is well below its previous levels, and some of the likely causes of the crisis are still there, waiting for a long-term appropriate remedy.

A main concern for the next future consists in the ‘exit strategy dilemma’: on one side, early exit from public spending and monetary easing would slowdown the recovery and threaten deflation and long-term unemployment. On the other side, keeping a high deficit spending and an accommodating monetary policy would trigger concerns about fiscal sustainability and expected inflation, with the consequent increases in long-term rates and therefore in lending rates on personal and corporate loans, thus leading to a crowding out of consumption and investment from the private sector. Read the rest of this entry »

Recognizing the need to expand the U.S. broadband network to ensure America’s infrastructure and economic development, Congress tasked the Federal Communications Commission (FCC) with developing a national broadband plan by February 17, 2010.[1] During the current financial crisis EU as well as the Member states wish to show that work is continuing despite the institutional deadlock of the Lisbon Treaty. Commitment to the European project is a risky path, but it is the only one that is capable of sustaining economic growth, of generating the support of the citizens, and of creating innovative jobs. New European Commission presided by José Manuel Barroso would need concrete projects and provide tangible benefits for citizens and support innovation and long term economic growth.  

In the field of the broadband access, for want of a unifying political plan and a strong economic vision, we have reached an impasse without an effective political blueprint. After the progress made by the European Union in the 1980s and 1990s, not least as a result of the Delors Commission’s initiatives, the EU has succeeded in opening up national markets. However, a true opening-up of the European market and the establishment of a single market is yet to be achieved. Read the rest of this entry »