In this latest commentary originally published by the Peterson Institute for International Economics, PIIE Senior Fellow and frequent AICGS contributor Jacob Kirkegaard examines the role of brinksmanship among politicians in both Europe and the United States, including an analysis on the effects of the adoption of such a policy.

“Why Europeans and Americans Are Addicted to Budget Brinkmanship,” by Jacob Kirkegaard, originally published by the Peterson Institute for International Economics.

  • K Bledowski

    An insightful take on the balance of power in Congress. Indeed, the Republicans may have less room for maneuver before the next round of fiscal negotiations than is commonly assumed.

    “I lament the necessity of using markets to coerce euro area political leaders into surrendering political sovereignty. But I am optimistic that a similar strategy will succeed in Washington.”

    Political sovereignty is endogenous not to markets but to the electorates (short of war). It’s a political choice issue, whether in Brussels or Washington or Berlin for that matter.