The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs

This book offers a critical assessment of the history of the euro, its crisis, and the rescue measures taken by the European Central Bank and the community of states. The euro induced huge capital flows from the northern to the southern countries of the Eurozone that triggered an inflationary credit bubble in the latter, deprived them of their competitiveness, and made them vulnerable to the financial crisis that spilled over from the US in 2007 and 2008. As private capital shied away from the southern countries, the ECB helped out by providing credit from the local money-printing presses. The ECB became heavily exposed to investment risks in the process, and subsequently had to be bailed out by intergovernmental rescue operations that provided replacement credit for the ECB credit, which itself had replaced the dwindling private credit. The interventions stretched the legal structures stipulated by the Maastricht Treaty which, in the absence of a European federal state, had granted the ECB a very limited mandate. These interventions created a path dependency that effectively made parliaments vicarious agents of the ECB's Governing Council. This book describes what the author considers to be a dangerous political process that undermines both the market economy and democracy, without solving southern Europe's competitiveness problem. It argues that the Eurozone has to rethink its rules of conduct by limiting the role of the ECB, exiting the regime of soft budget constraints and writing off public and bank debt to help the crisis countries breathe again. At the same time, the Eurosystem should become more flexible by offering its members the option of exiting and re-entering the euro - something between the dollar and the Bretton Woods system - until it eventually turns into a federation with a strong political power centre and a uniform currency like the dollar.

Business & Money

Sinn, Hans-Werner

Economics

Oxford University Press

Casino Capitalism: How the Financial Crisis Came About and What Needs to be Done Now

In Casino Capitalism, Hans-Werner Sinn examines the causes of the banking crisis, points out the flaws in the economic rescue packages, and presents a master plan for the reform of financial markets. Sinn argues that the crisis came about because limited liability induced both Wall Street and Main Street to gamble with real estate properties. He meticulously describes the process of lending to American homeowners and criticizes both the process of securitizing and selling mortgage claims to the world, as well as the poor job rating agencies did in providing transparency. He argues that the American Dream has ended because the world now realizes that this dream was built on loans that are never likely to be repaid. Sinn also asserts that the banking crisis has not yet been resolved, because the necessary write-offs of toxic assets have largely been swept under the carpet. Comparing actual worldwide write-offs with those estimated by the IMF estimates, he concludes that substantial parts, if not most, of the true losses have yet to be revealed and that the banking systems of many countries are on the brink of insolvency. In view of this, he directs sharp criticism at the various economic rescue packages, arguing that the plans assume that banks have a liquidity problem while, in fact, they suffer from a solvency crisis. Sinn points out that the conflict between the goals of rescuing banks in the short term and inducing more prudent behaviour in the long term requires the government to help the banks, but not their shareholders, by becoming a temporary co-owner. In addition, he calls for higher equity requirements, a worldwide return to more cautious accounting methods, a ban on extremely speculative short selling, and strict regulations on conduits, hedge funds and credit default swaps.This authoritative account provides an invaluable overview for academics, students, policymakers, politicians, and all those with an interest in the unprecedented 2008 banking crisis.

In Casino Capitalism Hans-Werner Sinn examines the causes of the banking crisis, points out the flaws in the economic rescue packages, and presents a master plan for the reform of financial markets. Sinn argues that the crisis came about because limited liability induced both Wall Street and Main Street to gamble with real estate properties. He meticulously describes the process of lending to American homeowners and criticizes both the process of securitizing and selling mortgage claims to the world, as well as the poor job rating agencies did in providing transparency. He argues that the American Dream has ended because the world now realizes that this dream was built on loans that are never likely to be repaid. Sinn also asserts that the banking crisis has not yet been resolved, because the necessary write-offs of toxic assets have largely been swept under the carpet. Comparing actual worldwide write-offs with those estimated by the IMF estimates, he concludes that substantial parts, if not most, of the true losses have yet to be revealed and that the banking systems of many countries are on the brink of insolvency. In view of this, Sinn directs sharp criticism at the various economic rescue packages, arguing that the plans assume that banks have a liquidity problem while, in fact, they suffer from a solvency crisis. Sinn points out that the conflict between the goals of rescuing banks in the short term and inducing more prudent behaviour in the long term requires the government to help the banks, but not their shareholders, by becoming a temporary co-owner. In addition, he calls for higher equity requirements, a worldwide return to more cautious accounting methods, a ban on extremely speculative short selling, and strict regulations on conduits, hedge funds and credit default swaps. This authoritative account provides an invaluable overview for academics, students, policymakers, politicians, and all those with an interest in the unprecedented 2008 banking crisis.

Finance

A leading economist develops a supply-side approach to fighting climate change that encourages resource owners to leave more of their fossil carbon underground.
The Earth is getting warmer. Yet, as Hans-Werner Sinn points out in this provocative book, the dominant policy approach―which aims to curb consumption of fossil energy―has been ineffective. Despite policy makers' efforts to promote alternative energy, impose emission controls on cars, and enforce tough energy-efficiency standards for buildings, the relentlessly rising curve of CO2 output does not show the slightest downward turn. Some proposed solutions are downright harmful: cultivating crops to make biofuels not only contributes to global warming but also uses resources that should be devoted to feeding the world's hungry. In The Green Paradox, Sinn proposes a new, more pragmatic approach based not on regulating the demand for fossil fuels but on controlling the supply.
The owners of carbon resources, Sinn explains, are pre-empting future regulation by accelerating the production of fossil energy while they can. This is the “Green Paradox”: expected future reduction in carbon consumption has the effect of accelerating climate change. Sinn suggests a supply-side solution: inducing the owners of carbon resources to leave more of their wealth underground. He proposes the swift introduction of a “Super-Kyoto” system―gathering all consumer countries into a cartel by means of a worldwide, coordinated cap-and-trade system supported by the levying of source taxes on capital income―to spoil the resource owners' appetite for financial assets.
Only if we can shift our focus from local demand to worldwide supply policies for reducing carbon emissions, Sinn argues, will we have a chance of staving off climate disaster.

The Green Paradox: A Supply-Side Approach to Global Warming (Mit Press)

The MIT Press

Jumpstart: The Economic Unification of Germany

The unification of Germany is one of the most wrenching and dramatic transitions in economic history. A policy issue of worldwide interest, it holds key lessons for the remaining post-socialist economies. In Jumpstart two well-known German economists synthesize a vast body of literature to present the first well-structured, clearly argued analytical account of the reunification process and the policy alternatives. The Sinns' authoritative and primarily nontechnical account will Interest nonspecialists who want to keep up with economic events. Their summary of the German experience with radical reform will provide a valuable reference for specialists in transition economics.  Contrary to fears that German reunification would bring on a resurgence of nationalism, the Sinns point out, It has met with apathy and indifference. Nonetheless, a great deal is at stake in the battle for redistribution, and the present economic chaos poses a serious threat to social stability.  The Sinns suggest a "social pact" between labor and management that could put an end to the struggle over distribution and speed up the transformation of the former East German communist economy into a market economy. The core of this pact is a shift In emphasis from factor prices to the fundamental Issues of compensation and the distribution of real wealth.  Gerlinde Sinn was formerly Lecturer in the Department of Statistics at Dortmund University and in the Department of Economics at Mannheim University. Hans-Werner Sinn is Director of the Center for Economic Studies at University of Munich.

Jumpstart/the Economic Unification of Germany

Sinn, Gerlinde

Mit Pr

Winner of the 2003 getAbstract/Financial Times Germany Business Book Award. What has happened to the German economic miracle? Rebuilding from the rubble and ruin of two world wars, Germany in the second half of the twentieth century recaptured its economic strength. High-quality German-made products ranging from precision tools to automobiles again conquered world markets, and the country experienced stratospheric growth and virtually full employment. Germany (or West Germany, until 1989) returned to its position as the economic powerhouse of Europe and became the world's third-largest economy after the United States and Japan. But in recent years growth has slowed, unemployment has soared, and the economic unification of eastern and western Germany has been mishandled. Europe's largest economy is now outperformed by many of its European neighbors in per capita terms. In Can Germany Be Saved?, Hans-Werner Sinn, one of Germany's leading economists, takes a frank look at his country's economic problems and proposes welfare- and tax-reform measures aimed at returning Germany to its former vigor and vitality. Germany invented the welfare state in the 1880s when Bismarck introduced government-funded health insurance, disability insurance, and pensions; the German system became a model for other industrialized countries. But, Sinn argues, today's German welfare state has incurred immense fiscal costs and destroyed economic incentives. Unemployment has become so lucrative that the private sector, already under pressure from international low-wage competitors, has increasing difficulties in paying sufficiently attractive wages. Sinn traces many of his country's economic problems to an increasingly intractable conflict between Germany’s welfare state and the forces of globalization. Can Germany Be Saved? (an updated English-language version of a German bestseller) asks the hard questions—about unions, welfare payments, tax rates, the aging population, and immigration—that all advanced economies need to ask. Its answers, and its call for a radical rethinking of the welfare state, should stir debate and discussion everywhere.

Can Germany Be Saved?: The Malaise of the World's First Welfare State

A prominent economist argues in this German bestseller that Germany can rescue its sluggish economy by transforming its social welfare system and reforming its labor market and tax structure, offering insights into economic dilemmas experienced by all advanced economies in a time of globalization.What has happened to the German economic miracle? Rebuilding from the rubble and ruin of two world wars, Germany in the second half of the twentieth century recaptured its economic strength. High-quality German-made products ranging from precision tools to automobiles again conquered world markets, and the country experienced stratospheric growth and virtually full employment. Germany (or West Germany, until 1989) returned to its position as the economic powerhouse of Europe and became the world's third-largest economy after the United States and Japan. But in recent years growth has slowed, unemployment has soared, and the economic unification of eastern and western Germany has been mishandled. Europe's largest economy is now outperformed by many of its European neighbors in per capita terms. In Can Germany Be Saved?, Hans-Werner Sinn, one of Germany's leading economists, takes a frank look at his country's economic problems and proposes welfare- and tax-reform measures aimed at returning Germany to its former vigor and vitality.Germany invented the welfare state in the 1880s when Bismarck introduced government-funded health insurance, disability insurance, and pensions; the German system became a model for other industrialized countries. But, Sinn argues, today's German welfare state has incurred immense fiscal costs and destroyed economic incentives. Unemployment has become so lucrative that the private sector, already under pressure from international low-wage competitors, has increasing difficulties in paying sufficiently attractive wages.Sinn traces many of his country's economic problems to an increasingly intractable conflict between Germany's welfare state and the forces of globalization. Can Germany Be Saved? (an updated English-language version of a German bestseller) asks the hard questions―about unions, welfare payments, tax rates, the aging population, and immigration―that all advanced economies need to ask. Its answers, and its call for a radical rethinking of the welfare state, should stir debate and discussion everywhere.

The unification of Germany is one of the most wrenching and dramatic transitions in economic history. A policy issue of worldwide interest, it holds key lessons for the remaining post-socialist economies. In Jumpstart two well-known German economists synthesize a vast body of literature to present the first well-structured, clearly argued analytical account of the reunification process and the policy alternatives. The Sinns' authoritative and primarily nontechnical account will Interest nonspecialists who want to keep up with economic events. Their summary of the German experience with radical reform will provide a valuable reference for specialists in transition economics. Contrary to fears that German reunification would bring on a resurgence of nationalism, the Sinns point out, It has met with apathy and indifference. Nonetheless, a great deal is at stake in the battle for redistribution, and the present economic chaos poses a serious threat to social stability. The Sinns suggest a "social pact" between labor and management that could put an end to the struggle over distribution and speed up the transformation of the former East German communist economy into a market economy. The core of this pact is a shift In emphasis from factor prices to the fundamental Issues of compensation and the distribution of real wealth.Gerlinde Sinn was formerly Lecturer in the Department of Statistics at Dortmund University and in the Department of Economics at Mannheim University. Hans-Werner Sinn is Director of the Center for Economic Studies at University of Munich.

MIT Press]

Competition between companies tends to be beneficial for the general public, but is this also true for competition between States in a world with global financial markets, low transport costs, and increasing migration? In this book, Sinn provides a solid economic analysis of the competitive forces at work and addresses how we should organize competition between systems so they will enhance the efficiency of these systems, as opposed to acting destructively on them. 
<ul>
<li>Provides a thorough economic analysis of the competitive forces at work between nations and governments.</li> <li>Analyzes a wide range of state activities, including taxation, public goods provision, income redistribution, environmental policy, safety standards, and competition policy.</li> <li>Addresses ways to organize competition so it will enhance the efficiency of these systems.</li> </ul>

The New Systems Competition (Yrjo Jahnsson Lectures)

Wiley/Blackwell

See the best price to sell, buy, or rent books by Sinn, Hans-Werner. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Books by Sinn, Hans-Werner

See the best price to sell, buy, or rent books by Sinn, Hans-Werner. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs

The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs

Casino Capitalism: How the Financial Crisis Came About and What Needs to be Done Now

Casino Capitalism: How the Financial Crisis Came About and What Needs to be Done Now

The Green Paradox: A Supply-Side Approach to Global Warming (Mit Press)

Jumpstart/the Economic Unification of Germany

Can Germany Be Saved?: The Malaise of the World's First Welfare State

Can Germany Be Saved?: The Malaise of the World's First Welfare State

Jumpstart: The Economic Unification of Germany

The New Systems Competition (Yrjo Jahnsson Lectures)