Four points against the conventional wisdom

1. Eurozone breakup is bullish. The conventional wisdom sees eurozone breakup as calamitous. This view has even been supported by scholars who should know better. In my private discussions with “2nd tier” scholars (i.e. people well below the radar), our only conclusion is that these high-profile scholars are trapped. They’re in a predicament familiar to […]

Risk of unilateral default/devaluation (crude but intriguing)

Indicator Change between 2009 and 2010, % row variable proxy Greece Ireland Italy Portugal Spain a Growth outlook real-effective exchange rate* -0.3 -6.9 -3.6 -2.5 -2.7 b Primary budget primary budget/GDP** 6.3 -2.0 0.1 2.0 2.4 c Continent liabilities house prices*** -4.3 -15 -0.3 1.6 -1.0 d Political pressure unemployment rate** 3.0 1.1 0.4 0.8 […]