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Thursday, March 9, 2017

The E.U.’s Central Bank: Beholden to State-Level Politics

Faced with the rise of anti-euro candidates for state offices throughout the E.U., Mario Draghi, the president of the E.U.’s central bank deemed it politically prudent to depart from the light world of cool economic data to mount a spirited defense of the euro and even free trade in March, 2017. With the UK having voted to secede from the Union, he could not assume that the state of the Union would continue to be inherently viable. Indeed, some political candidates at the state level were “questioning the whole idea of a united Europe and the European Central Bank’s fundamental reason for being.”[1] 

The complete essay is at Essays on Two Federal Empires.


[1] Jack Ewing, “As E.C.B. Charts Economic Course, Politics Complicate the Picture,” The New York Times, March 9, 2017.

Wednesday, March 8, 2017

Disentangling a Worsening Trade Deficit: Sector-Specific Industrial and Macro Economic Policy


The U.S. trade deficit rose 9.6% in January, 2017, to the highest level since 2012. The gap of $48.5 billion of exports exceeding imports looks daunting, yet the story is more complex at the sector level.[1] According to Neil Irwin of The New York Times, “What really matters is not whether the trade deficit is rising or falling. What matters is why?”[2] Distinguishing macro factors such as a strengthening dollar from sectoral strengths and weaknesses is thus necessary.
The full essay is at "Disentangling a Worsening Trade Deficit."


1. Neil Irwin, “The Huge January Trade Deficit Shows Trump’s Hard Job Ahead,” The New York Times, March 7, 2017.
2. Ibid.




The Port of Oakland (Source: Jim Wilson/NYT)

Monday, March 6, 2017

Federalizing State Warheads in the E.U.: The Problem of Excessive State Power in a Federal System

Only months after Donald Trump became the federal president in the U.S., an idea, “once unthinkable,” was “gaining attention in European policy circles: a European Union nuclear weapons program.”[1] The arsenal in the state of France would be “repurposed”—which is to say, federalized in American terms—to protect the European Union rather than merely one of its states. The command of the weapons, as well as the funding plan and defense doctrine, would be federal. Even though the question of whether the E.U. could continue to count of American protection—there being dozens of American nuclear weapons in the E.U.—was at the time most tantalizing, I submit that the matter of federalism in the case of the E.U. is salient too.

The complete essay is at Essays on Two Federal Empires.


[1] Max Fisher, “Fearing U.S. Withdrawal, Europe Considers Its Own Nuclear Deterrent,” The New York Times, March 6, 2017.