Just some economic wisdom 

All figured out for the Austrian economy? Karl Aiginger, professor of economics at the university of Linz and newly appointed head of the Austrian Institute for Economic Research WIFO, which provides economic analysis and policy guidelines for the Austrian government and other institutions, presents a kind of policy roadmap in an interview with DiePresse [DE]. Below my summary of his wise words.

Q. What is required to lower unemployment in Austria?
A. More economic growth, > 2.5% p.a. Growth needs to become the single focus of economic policy. (This btw is exactly what Chancellor Schüssel said [DE] when he praised the compromise on the EU's stability and growth pact achieved last night - what is needed now was growth even more than stability.) This includes: better education, better technology transfer, better infrastructure, less bureaucracy, more flexibility. There is no golden bullet.

Q. How can Austria maintain its good position in economic league tables?
A. If Austria is to keep the third-highest per-capita income in the EU, it needs to be among the top three with its R&D expenditure quota - and it is not there by far, just barely above average. There are some indications of progress in the right direction, but it is not yet clear whether that is real.

Q. Can the movement of jobs to the East be stopped?
A. There is an irreversible trend of jobs in industry being lost, around 2% p.a. However, service jobs are being created at the same time that are close to industry - these are important, but require new skills in the economy.

Q. Will the pension reform executed by the government be enough to save the system?
A. Only if economic growth can be raised to 3% p.a. If growth hovers around 2% as now, it will not be enough.

What I find interesting about these answers is that they seem so clearly right. If one is ready to accept mainstream economics discourse as a framework, then these kind of statements would seem to be acceptable as a common ground beyond party-political divisions and disagreement. As such, they are potentially unfit material for a blog post [yes, I can see you yawning over there], but they might still be useful as a reminder to guide the political musings of bloggers like this one.

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