Don’t shoot the messenger: About the diversity of economic policy conclusions in the face of severe identification issues
Views on how to pursue the process of European integration widely diverge. The disagreements over the necessity of an alignment of liability and control, the importance of adherence to fiscal rules, and the priorities to be set in crisis management have all become highly transparent since the Eurozone slid into an existential crisis, starting with the Greek debt crisis of 2010. The dispute manifests itself most prominently in the conflicting positions taken by the member states of the Eurozone, with the German government being an important and, at the same time, perhaps the most intensely criticised protagonist. While crisis management required them to act pragmatically, German officials are notorious for their insistence on compliance to rules. The adamant positions taken by the German government have even led to the narrative that the institutionalised economic policy advice in Germany might be to blame. It is often alleged to operate out of synch with the development of the field of economics, being non-empirical and wed to the ideas of the orthodox school of thought of ordoliberalism. The focus of this harsh criticism often lies on Germany’s most important institution for providing economic policy advice, the German Council of Economic Experts (GCEE). This narrative, however, goes completely astray. Empirical evidence and an intense discourse over conflicting arguments raised in the current economic literature lie at the heart of its work, not an ideological blueprint.
Schmidt, C. (2017), Don’t shoot the messenger: About the diversity of economic policy conclusions in the face of severe identification issues. In Thorsten Beck und Hans-Helmut Kotz (Hrsg.), Ordoliberalism: A German oddity?. London: Centre for Economic Policy Research (CEPR), 63-75.