Economics professor Dr. Lars P. Feld and the Corona Crisis: What about the Future of the Global Economy?

08. May 2020 – Oliver Stoldt

Since Corona, economics professor and economist Dr. Lars P. Feld constantly has inquiries about, well, Corona. The virus dominates the world and a blatantly important part of it remains the economy.

Lars P. Feld, 48, is a native of Saarbrücken, Saarland, Germany. Today he lives and works at the University of Freiburg in the south of Germany and has been managing the institute for ten years. Lars P. Feld is an Ordo-Liberal and therefore campaigns for a strong but lean state.

At the moment, many eyes are on him. As an economic guide, he is asked about the future of Germany and the world. Before that, he dealt with “pre-corona” issues such as minimum wages, the refugee crisis, simply everything that moves the economy in one direction or another.

Right now, it’s all about Corona. The ECB central bank’s bond purchases have just caused an outcry in Germany and Europe. It is now decided by the court whether the purchases were legal at all. In an interview with Deutschlandfunk, he said, matter-of-factly as he is, that “in the history of monetary policy it is perfectly normal for a central bank like the ECB to buy government bonds.” Lars Feld adds that “it is still very difficult to decide the legal case, because the borderline between monetary and economic policy, which is a regular issue here, cannot be determined easily either legally or economically.”

Book Lars P. Feld as Keynote Speaker

Prof. Dr. Lars Feld has a so wonderfully calm attitude which one appreciates even more in stormy times. Regarding the debt issue, which Corona brings to back to the surface, he says: “There is no alternative that we first have to incur significantly more debt this year due to the drop-in revenues.” He believes the forecast number of the Germany Federal Ministry of 6.3 percent minus to be realistic. Classic economic stimulus programs cannot be implemented with restrictions such as those created by Corona so that more creative approaches are needed.

When asked about his thoughts on an economic stimulus program in an interview with the magazine Business Insider, Lars Feld answered carefully: “First of all, it is important to note that classic economic policy instruments will hardly have any effect in the current situation. (…) So, economic policy instruments are primarily about the time after the lockdown was lifted. Then you have to look carefully which instrument works at all. Infrastructure programs have little effect if the construction industry can continue to work relatively heavily until then. On the expenditure side, it is more about climate policy projects. On the revenue side, permanent measures such as the abolition of the solidarity surcharge are likely to bring something for everyone.”

Lars P. Feld and the Future of the Global Economy

However, even an economist like Lars P. Feld has no answers to some questions, for example how many short-time workers and unemployed people he is expecting for Germany by the end of the year? Answer: “At the moment, this cannot be reliably assessed.”

Especially in the current time, a top speaker with his caliber is certainly a great asset. His lecture topics in addition to the corona crisis and its effects on the global economy are for example, ways out of the European debt crisis, international effects of the debt crisis or shadow economy and undeclared work and what consequences both have for the economy.