TheMarketForIdeas

Recent Developments in the Economic Governance of the European Union

Grațiela-Denisa Iordache

The existence of Economic and Monetary Union creates a rather eccentric approach of the monetary and fiscal policy. While the European Central Bank’s monetary policy targets price stability union-wide, the fiscal policies have a national character and may have pro-cyclical effects. The large imbalance between the monetary and fiscal policies is a source of vulnerability towards achieving the European Union’s objectives.  More

Smaranda Brăescu: The Girl with Her Head in the Clouds

Raluca Șancariuc

In the early 1900s, modern aviation was still in its infancy. It was an era when iconic inventions and discoveries in terms of flying machines were only starting to see the light of day. The first pilot licence obtained in Romania was issued in 1911, after the first Romanian aviation school was opened in the spring of the same year. Against this backdrop, a career in aviation was, in the 1900s, an uncharted road, especially in the case of women, for whom, at that time, it was globally uncommon to vote or to have a job… any type of job. Just to remind you that the first European country to introduce women’s suffrage has done so in 1907, while Romania gave women the right to vote only in 1938. Also in Romania, married women were allowed to manage their own income only starting 1926. More

Corona-blues: A Brief Reflection on the Challenges of Managing the Coronavirus Pandemic

Adrian-Ioan Damoc

That the new coronavirus has taken the world by storm is no longer a surprise, causing significant casualties worldwide as well as civil unrest and disrupting economies, with ever grimmer prognoses. Much has been said about both the humanitarian impact as well the myriad effects it had on the political, social and economic levels. From a healthcare perspective, one might expect the world’s most developed economies to fare far better than their developing counterparts. Yet a quick look at the numbers reveals a rather intriguing picture: out of the world’s over 13.5 million confirmed cases of contamination, over 4 million come from some of the world’s most developed economies, such as the United States, the United Kingdom, Italy, Spain, France, Germany and Sweden. These same countries account for more than half of the deaths caused by the virus. Of course, these are absolute numbers that we are talking about, but even if we switch to looking at relative measures, such as the number of deaths or infections per 1 million people, developed countries still rank at the top.  More

Foot(Glo)ballisation by World Cup

Octavian-Dragomir Jora

If people were to tell their story to the inhabitants of other worlds in this universe, it would suffice to produce a chronicle of earthly discussions containing the keyword or hashtag #WorldCup. I believe we can safely leave out “football” from this label – the elliptical expression “World Cup” instantly directs our thoughts to the sport that will have grown into a religion defined by the “new testament” of Diego Maradona (1986) and his “second coming” in the form of Lionel Messi (2022). The secular religion of football is economic as well as political in nature; in other words, it is an instance of “scientifically” exploited “culture”. The Qatar edition is one of the clearest examples thus far of how the downright scientific marketing of a symbolic good (i.e., football) can contribute either insidiously or ostentatiously to the planetary management of cultural values (a potpourri of frigid conservatism and frivolous progressivism): a campaign worth some $300 billion meant to wash the image of some and the brains of others on the shores and hydrocarbon reserves of the Gulf. More

Photon(e)s 1.0

A portrait of Romina, done in a much too warm day, somewhere in Athens, along with a palm tree leaf. It’s a compositional experiment of shadow and colour and an attempt at capturing a bit of the atmosphere of the place we were living back then. More

Ukraine 2030. A Doctrine for Sustainable Development

Ganna Kharlamova, Nina Chala, Oleksandra Gumenna

An analysis of the declared strategies and the current economic model of Ukraine indicates that the outdated socio-economic and political paradigm is a key issue that prevents the country from reaching the horizons of balanced development and is reducing Ukraine to the level of a raw material appendage to the developed countries. More

The Absorption of Uncertainty and Exiting from the Pandemic

Emil Dinga

The individuals (and, to some extent, the groups) make decisions based on their perception regarding the future, rather than on a rigorous calculus based on accurate models of rationality (such a conclusion has long been reached by the researchers, and, very curiously, even by some economists!). The perceptions are, in fact, an inextricable mix between information, experience and expectations. And, of course, all of the three ingredients are tinged with uncertainty. Uncertainty is very different from risk – while we can assign to the risk some probability distributions in order to “know” it at least probabilistically, this cannot be done with uncertainty – an obvious clarification given by Frank Knight almost a century ago. Even more, the question of uncertainty in the decision process arises when the public decision-making is involved because:  More

Global Initiatives and Supply Chains

Alexandru Georgescu

The security of global supply chains is a topic that the global public is actively debating for the first time since the OPEC crisis of 1973.There have been incidents since then that have highlighted the vulnerabilities produced by this stage of globalization, but none with universal and widespread impact until the coronavirus pandemic, which was followed up by the war in Ukraine starting in February 2022 and the sanctions levied against Russia. Two contradictory phenomena occurred during the pandemic – on the one hand, border closures and measures to reserve domestic production of medical supplies and equipment produced supply crises. On the other side, when restrictions were eased, global transportation thawed and the economy recovered, several nations experienced a crisis in both domestic and global logistical capacity (the USA and the UK being the best-known cases). Notable recent examples from 2020-2022 include: the oil tanker crisis waiting off the US coast due to a lack of oil storage capacity in the context of declining demand (leading to negative oil prices in futures markets); the international freight transport capacity crisis; the semiconductor crisis, which forced production cuts in the automotive industry, including in Romania; the raw materials crisis for the pharmaceutical industry, felt for example in India; the plastics production crisis; domestic fuel and freight supply crises in countries such as the UK; US problems in unloading container ships and ensuring multimodal transport, etc. There are several causes for these events, including government restrictions, consumer elasticity, the influence of economic uncertainty on business decisions to cut back on transportation fleets (especially road freight), the pandemic’s effects on employee health, and more. They all have one thing in common: the pandemic’s role as a persistent source of uncertainty and a force disrupting international and domestic economic connections.  More

Photon(e)s 2.0

“There is no story. It’s just a question of shapes and light”, Harry Gruyaert says. And, indeed, this is an example of how, despite the fact the human beings are always craving hidden stories and explanations, these are not always necessary. Sit down, breath in and just look at the colors, shapes and the way the light comes in.  More

Russia’s Return to the Middle East

Răzvan Munteanu

The American President, Donald Trump, recently announced his intentions to negotiate with Saudi Arabia, Egypt and Qatar to rethink their stated intentions of purchasing military equipment from the Russian Federation.David Schenker, a candidate for Assistant Secretary of State for Near Eastern Affairs, was quoted by Reuters that he “would work with our allies to dissuade them, or encourage them, to avoid military purchases that would be potentially sanctionable”. More

Defined Contribution Pensions, But Not Really

Emil Dinga

From a theoretical (and philosophical) point of view, the (defined contribution) pension in a pay-as-you-go system is an impersonal, non-coexistent, inter-generational, and mandatory quid pro quo. The referee which must assure that the quid pro quo is respected is the state (we have here a nice example of a hard core of public interest which would be desirable to be extended to others, i.e. national interests). As it is inter-generationally applied, such a “social contract” faces some accidents, some of which are objective, others not quite. For example, a current generation “i”, is paying social contributions during its active life to the generation „i-1” – I will do not complicate the discussion by taking into account that, in fact, there is an overlapping of generations both as paying social contributions and as benefiting from defined-contribution pensions (this would be useful if done for the public finance decision). In turn, the current generation “i” (which is the future “i+1” retired generation) will benefit for its pensions from the social contributions paid by generation “i+1”, and so on. This mechanism seems to provide a roughly fairness, because the pensions are calculated based on the effective social contributions paid during the active (that is, economically productive) life. Rawls, as pure contractarian, would say it should be designed and implemented in the legislative stage of making the social contract, not in the original position. Below, I ask myself whether such fairness is really effective and, if not, how we should to proceed. The discussion is inherently coupled to the debates regarding the increasing of the pensions in Romania. I will do not discuss the (judicial) fact that a normative act which was already been constitutionally enacted by the legislative authority leaves, I think, an extremely narrow room, if any, for doubts regarding its implementation, but, instead, I will deal with only some very simple economic and social questions (more exactly, of social justice).  More