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Paris update from the Economist, 25-July-1931

On French bargaining power with Germany over concessional loans to keep Germany in the euro area gold standard:“The strength of the French situation, it is universally recognised here, is that France possesses an abundance of capital available with which to … Continue reading

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The fruit of wrong-headed policy

Namely, unnecessary austerity. Contractionary policy is contractionary. Who knew? 

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Bitcoin

A version of this post was published in the Zintro Blog for 6-May-2013.Most of the commentary on Bitcoin centres on its in-built scarcity, which is meant to ensure its value rather like the inelastic supply of gold was meant to … Continue reading

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Temin (1993) on the Great Depression’s “Lessons for the present”

The transmission of the Great Depression provides the following lessons for the present. It is best to avoid macroeconomic shocks. But when they hit, then the second-best alternative is to suspend or discard the fixed exchange rates that linked economies … Continue reading

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Will the real Abenomics please stand up

Stephen King (HSBC) in the FT:In Japan’s case, previous experiments with QE – admittedly not on the same grand scale – mainly served to boost exports without any significant impact on domestic demand. In a world where other nations are … Continue reading

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A marker

Reading this update on Greece’s fascist Golden Dawn party. Be clear that a group like this, in power, is not consistent with being in the euro-area: they would not want to be in, and they would not be welcomed to … Continue reading

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Gatsby-ization

Does globalization undermine workers’ income in the developed economies? Put slightly differently: Does globalization Gatsby-ize the developed economies, insofar as the rewards from productivity growth are reaped by owners of capital rather than labour?The logic of this proposition seems pretty … Continue reading

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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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