Stiglitz: Germany must embrace fracking and nuclear power

In an interview on Welt , the famous Keynesian economist and Joseph Stiglitz brings a wave of empiricism and practicality to the discussion on the European economy and gives a couple of serious advice to Germany: it is not the time to be difficult and you have to invest in mining of gas with fracking and in nuclear energy. Furthermore, the ECB must be cautious about raising interest rates.

According to Stiglitz, inflation, which originates in the explosion of energy prices, must be addressed with measures relating to that sector, and without half measures:

Fracking is actually a possibility. Of course, we must not lose sight of the main goal of climate neutrality by 2050. But the good thing about fracking is that it is a short-term measure that you can start and finish just as quickly. Nuclear power is another possibility. I'm not a fan of this technology, but if you can keep nuclear power plants running longer, or even restore power plants that have been shut down, and still be safe, then it makes perfect sense to do so now.

A touch of practicality in a discussion often intoxicated by green ideology, but without energy there is no industry and without industry there is no growth and prosperity. Stiglitz, who is certainly not a dangerous sovereignist, clearly reminds us of this. But that's not all, because he also has pretty clear words for the ECB to which he gives some advice:

It is okay for me to bring interest rates to a normal level. But monetary authorities shouldn't try to fight inflation with higher interest rates. It would be counterproductive because it increases the risk of a recession. Furthermore, major investments could no longer be financed if interest rates were higher. And investments are urgent because we clearly have a supply problem.

So yes to the end of negative rates, but no to an uncontrolled increase in rates that could contain the investments necessary to fight inflation. Because elsewhere the empiric Stiglitz makes it clear that the solution to inflation does not come from monetary policies, but from an increase or improvement in supply. The exact opposite of what the Europeans and Germans in the lead are doing, limiting supply and wanting to raise rates.

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The Stiglitz article: Germany must embrace fracking and nuclear power comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/stiglitz-la-germania-deve-abbracciare-fracking-e-nucleare/ on Thu, 25 Aug 2022 08:00:01 +0000.