Peter Bofinger Explained

Peter Bofinger
Birth Date:	18 September 1954
Nationality:	German

Peter Bofinger (born September 18, 1954) is a German economist and a former member of the German Council of Economic Experts.

Career

Following his studies, Bofinger worked as staff member to the Council of Economic Experts between 1978 and 1981. From 1984 until 1990, he was an economist at the Bundesbank. Since 1992, Bofinger has been a professor at the University of Würzburg. Between 1997 and 1999, he served as Dean of the university’s Department of Economics.

Council of Economic Experts

Nominated by Germany’s trade unions, Bofinger succeeded Jürgen Kromphardt as member of the Council of Economic Experts in 2004.^[1] He has in the past oftentimes disagreed with the Council’s conclusions.^{[2] [3]}

During the period between 2012 and 2017, he issued 26 of the Council’s 27 minority votes.^[4] Among Bofinger's solitary dissensions to established policy was his 2010 advocacy for the adoption in Germany of a minimum hourly wage of 6 Euros, revising upwards his previous proposal for 4,50 Euros.^[5]

In 2013, he argued that a "five percent [wage] increase across all sectors" is necessary to prevent "wage dumping" and ensure that full-time employment provides "enough income,"^[6] stressing his disagreement with the dominant position that a minimum wage would have a negative impact on employment.^[7]

In 2005, Chancellor Gerhard Schröder proposed that Bofinger should replace Otmar Issing on the Executive Board of the European Central Bank (ECB) the following year;^[8] the post eventually went to economist Jürgen Stark.

From December 2011 until May 2012, Bofinger served in the Jacques Delors Institute’s Tommaso Padoa-Schioppa group, established by the Jacques Delors Institute with the task of "reflect[ing] on the reform of the Economic and Monetary Union of the European Union."^[9]

Fiscal policy in the European Union

Boifinger has written extensively on the need for European Union-wide state investment to combat the effects of climate change. In this, he acknowledges the obstacle that stands in the way of the required fiscal policy. That obstacle, Bofinger writes, is the "mindset, which says that governments must not borrow, they must not add to the national debt, and they must not spend more than they receive in revenue;" in other words, a bias against budget deficits, which calls for zero deficits, a target named in Germany Schwarze Null, or Black Zero.^[10] The bias comes from historical experience, he explains, such as the 1920's hyper inflation period, but it is not exclusive to Germany. In fact, it is taught in standard economic texts in almost all economics classes around the world.^[11]

In the same vein, Bofinger denounces the "arbitrary" and baseless criteria for fiscal policy set down by the Maastricht Treaty, such as limiting state debt to a maximum of 60% of yearly GDP.^{[10] [12]}

Dissent on Nobel award

Bofinger criticized the awarding of the 2022 Nobel Memorial Prize in Economic Sciences to Ben Bernanke, Douglas Diamond and Philip Dybvig as "[a] noble award for a ‘popular misconception’",^[13] because the award committee's description of banking ("they receive money from people making deposits and channel it to borrowers"^[14]) has been refuted by at least two major central banks, the Bank of England^[15] and the Deutsche Bundesbank.^[16]

Selected publications

• 1996 . The economics of orthodox money-based stabilisations (OMBS): The recent experience of Kazakhstan, Russia and the Ukraine . European Economic Review . 40 . 3–5 . 663–671 . 10.1016/0014-2921(95)00076-3. Bofinger. Peter .
• 2000 . A framework for stabilizing the euro/yen/dollar triplet . North American Journal of Economics and Finance . 11 . 2 . 137–151 . 10.1016/S1062-9408(00)00039-5 . Bofinger. Peter . 10.1.1.512.1539.
• Book: Monetary Policy: Goals, Institutions, Strategies, and Instruments . Reischle. Julian . Schächter. Andrea . 2001 . Oxford University Press . New York . 978-0-19-924856-8 . Bofinger. Peter.
• Wollmershäuser, Timo . 2001 . Is there a third way to EMU for the EU accession countries? . Economic Systems . 25 . 3 . 253–274 . 10.1016/S0939-3625(01)00021-8 . Bofinger, P .
• Wollmershäuser, Timo . 2003 . Managed Floating as a Monetary Policy Strategy . Economics of Planning . 36 . 2 . 81–109 . 10.1023/B:ECOP.0000012258.15614.d8 . Bofinger, Peter . 153630647 .

Other activities

Non-profit organizations

• Business Forum of the Social Democratic Party of Germany: Member of the Advisory Board on Economic Policy, since 2020.^[17]
• European Council on Foreign Relations: Member of the Board.
• Institute for New Economic Thinking (INET): Member of the Council on the Euro Zone Crisis (ICEC).
• Representative of Science to the Senate.^[18]
• Progressive Economy journal: Member of the Scientific Advisory Board.^[19]
• Verein für Socialpolitik ("Association for Social Policy"): Member of the Committee on Monetary Policy.

Editorial boards

• International Journal of Economics and Finance (IJEF): Member of the Board of Editors
• Wirtschaftsdienst journal: Member of the Scientific Advisory Board^[20]

Further reading

• Web site: German Stability Program 2024. 28 November 2024. Annual Report. Bundesministerium der Finanzen.

External links

• Peter Bofinger's Curriculum Vitae at the University of Würzburg

Notes and References

1. News: Schmid . Klaus-Peter. 4 March 2004. Der allerletzte Keynesianer . Die Zeit. The Very Last Keynesian. German . 28 November 2024.
2. News: Scally. Derek. 9 March 2015. Keynesian odd one out of Germany’s five ‘wise men’. Irish Times. 28 November 2024.
3. News: Jones. Claire . Chazan. Guy. 8 November 2017. German economy faces risk of overheating, experts warn. Financial Times. subscription. 28 November 2024.
4. News: Potrafke. Niklas . 14 September 2017 . Peter Bofinger: Der Letzte der Weisen. Peter Bofinger: The last of the wise. German . Frankfurter Allgemeine Zeitung. 28 November 2024.
5. News: Kaufmann . Matthias . 29 March 2010. Peter Bolfinger: Schmarotzer gefährden das System nicht. Manager Magazin. Peter Bolfinger: Parasites do not endanger the system. German . 28 November 2024.
6. News: 6 January 2013 . Wirtschaftsweiser Bofinger fordert fünf Euro Mindestlohn. Economic expert calls for wage increase of five percent. German . Der Spiegel. 28 November 2024. Deutschland muss teurer werden auch funktioniert. Wir haben nur die Wahl zwischen hässlichen Alternativen: entweder eine zeitweise höhere Inflationsrate bei uns oder eine Deflation in Südeuropa.. Germany must become more expensive to work. We only have a choice between ugly alternatives: either a temporarily higher inflation rate here or deflation in southern Europe..
7. Web site: Bofinger. Peter . Widerstreitende Interessen - Ungenutzte Chancen. Conflicting Interests - Untapped Opportunities. German. 28 November 2024. 2007 . https://web.archive.org/web/20091122232628/http://www.sachverstaendigenrat-wirtschaft.de/download/gutachten/ga06_ges.pdf. Annual Report. Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung [Council of Economic Experts] . 22 November 2009. dead .
8. News: 11 May 2015. Bankers battle for big jobs. Politico Europe. 28 November 2024.
9. Barnier. Michel. Michel Barnier. Bofinger. Peter. Davignon . Etienne . Delors . Jacques. Jacques Delors . Draghi. Mario . Mario Draghi. Lagayette. Philippe . Monti. Mario . Nielsen. Erik. Pisani-Ferry . Jean . Reynders . Didier . Trichet. Jean-Claude. Jean-Claude Trichet. The Euro, the investors and the governance . 4 April 2011 . Notre Europe. . 28 November 2024.
10. News: Christensen . John. 26 May 2020 . Black Zero against the Climate. . 29 November 2024.
11. Bofinger cites the highly popular in university classes book Principles of Economics of American economist Greg Mankiw, in which, it is stated falsely, as Bofinger claims, that public debt "crowds out," i.e. inhibits or makes more expensive, private-sector debt. See Christensen (2020).
12. Bofinger writes that if a debt limit means you spend less on the things that matter, then the limit is almost criminal.
13. Web site: Bofinger . Peter . 17 October 2022 . A noble award for a 'popular misconception' . 28 November 2024 . Social Europe . en-GB.
14. Web site: The Royal Swedish Academy of Sciences. 22 October 2022. The laureates explained the central role of banks in financial crises . 28 November 2024.
15. Web site: McLeay. Michael. Radia. Amar . Thomas. Ryland . 14 March 2014. Money creation in the modern economy . . 28 November 2024.
16. Web site: . 2017 . The role of banks, non-banks and the central bank in the money creation process . 28 November 2024.
17. Web site: Einsetzung eines Wirtschaftspolitischen Beirats. German. Establishment of an economic policy advisory board. . 23 March 2020 . November 28, 2024.
18. Web site: Mitglieder des Senats. German. Members of the Senate. Zuse-Gemeinschaft . 23 March 2020 . 28 November 2024.
19. https://www.bundesbank.de/resource/blob/635142/f0f287b0cc7f0ff34285fe7ef06d571f/mL/2018-01-18-frankfurt-bofinger-data.pdf CV
20. https://www.wirtschaftsdienst.eu/wissenschaftlicher-beirat.html Scientific Advisory Board