Growth & Transformation

Why we need a Great Turnaround of our current economies

What the module is about

Progressive voices in economic policy have recently begun to be heard again. In the EU and the US they have helped to steer recovery programmes towards both stabilising the economy and addressing environmental and social challenges. In both cases, the specific policy mix is partly driven by economic preferences, and partly by peculiarities of political economy and legal framework.

However, it remains unclear whether the current strategies can succeed. After all, both the US strategy (“Bidenomics”: high government investment, regulation) and the EU strategy (EU Green Deal: carbon pricing, moderate investment, regulation) leave important interactions and tensions between instruments and objectives underexposed. It is therefore uncertain whether the existing policy mix is sufficient to decarbonise the economy fast enough and at the same time ensure a just transition and long-term macroeconomic stabilisation. A failure of these agendas would have far-reaching consequences.

Goals of the project

The initiative “the great turnaround: How to stabilise the economy, reduce inequality and get to net zero at the same time” seeks to contribute to ensuring that the transformation is successful and proactively respond to the danger of populist counter-movements. To this end, it aims to bring together the different perspectives of international economic experts and derive the cornerstones of a transformative economic agenda that is able to achieve the “great turnaround”: a transformation of today’s capitalism with a triple dividend of massively reduced emissions and environmental impacts, a more equal distribution of wealth and income, and more resilient, stable economies and societies.

Process

From November until December 2021 leading economists will come together in three focused and interactive roundtables to explore common ground for a shared agenda. The workshops will be co-hosted by Adam Tooze and centred on three themes:

  1. Effective policy mixes to accelerate the green transformation
  2. Designing policy pathways for a just transition
  3. The macroeconomics of a green transformation that leaves no one behind

Building on the discussions and their expertise participants will develop articles on specific subthemes and questions that will form part of a joint booklet.

All contributions will be launched at the transformative responses conference in March 2022.

The project is hosted by Heinrich Böll Foundation, Finanzwende Recherche and ZOE-Institute for Future-fit Economies.

Module: Scenario Analysis

Will future crises be induced by financial or climate-related events and how likely are they? We analyse potential causes of future crises.

Module: Central Banking

Central banks are the first line of defence in times of crisis. What should be their role in the socio-ecological transformation and what could potential reform look like?

Module: Financialisation

Our systems’ short-term focus on financial returns is an obstacle to the transition and responsible for our vulnerability to crises. We want to find ways on how to reign in the financial sector.