Monthly Archives: March 2013

Iceland, Ireland … and Cyprus

So the debate is on. Should Cyprus leave the euro-area (i.e. issue its own currency)? Alexander Apostolides says No. I’ve suggested recently that even the best-performing of the euro-adjustment group (i.e. Ireland, Spain, Italy, Portugal, Greece and now Cyprus) hasn’t performed as … Continue reading

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“Internal devaluation” versus “devaluation devaluation”

One more go at the East Asia 1997 versus Euro Area 2008 comparison. The back story is that East Asia underwent a severe crisis in 1997-98, which saw the collapse of its overvalued currency pegs. But, surprise surprise, this “devaluation devaluation” … Continue reading

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Understanding Cyprus

The problem in Cyprus is the banking sector. To get this, you just need to look at the balance sheet of a bank, as above. Cyprus banks saw the value of their assets fall in several categories above. They were exposed … Continue reading

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Stylised ‘facts’

Probably for anyone with an expertise not shared widely, there are frustrations about what people seem to “know” about your field. I’ll be less oblique:People seem to “know” that one of the causes of the Great Depression (globally) was competitive … Continue reading

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To grow or not to grow, (East Asia crisis versus Eurozone crisis)

A friend recently mused that, if the euroarea periphery were not in a single currency area, the crisis we’ve seen so far would look a lot more like the 1997-98 East Asia crisis. Greece would have ‘fallen’, and contagion would … Continue reading

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Cyprus

Plenty of good commentary out there. See here and here especially. Cyprus’ EU partners are saying: “Not me — we didn’t insist on a haircut for small depositors.” So Nicosia wanted to protect its position as a banking centre. This is less … Continue reading

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Pushing back against the “Can’t solve debt with more debt!” argument

Referring to the argument that, Hey, we have a problem of too much debt. You can’t solve it by adding more debt. See Krugman versus the UK government on BBC Newsnight for a recent example (go to 39:00). 1. Reject the … Continue reading

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Un-learning the lessons of Great Depression (ad-infinitum)

This blog is full of lessons-unlearned since the Great Depression. Why so? Because, fortunately or not, I’ve spent a portion of the last several years working on the Great Depression from a monetary and policy perspective. One of the interesting things … Continue reading

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Abenomics

Abenomics (noun): The use of macro policy to stimulate the economy. See also “Keynesianism”. Japan’s newfound enthusiasm for macro policy is going to provide a helluva interesting real-life test of the competing notions over whether OECD governments are doing too much … Continue reading

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A macroeconomic union

The euro’s main political effect is to drive a wedge through the EU, something not yet fully understood by the bloc’s policy establishment. The vast majority of insiders still treat it as a regulatory organisation at its heart, rather than … Continue reading

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