Lecture presented to the Georgetown University Graduate Program in International Management (Oxford, August 2012).
0:00 Introduction, Plan of the talk
1:00 Real exchange rate
4:10 Purchasing Power Parity
6:05 East Asia crisis
10:37 Hong Kong is the exception
14:20 Financial globalization
16:45 Internal devaluation in Argentina
23:10 Pathways out of the crisis
25:10 De-globalization in Europe?
26:41 Monetary trilemma
28:38 History Lesson: The Great Depression
35:43 Beware dogmas
37:12 Q: How can you have capital controls without a black market?
39:24 Gresham’s Law: ‘bad money chases out good’
41:16 Q: How effective is devaluation if you don’t have a strong export market?
44:00 How can Greek democracy produce the ‘right’ policy?
46:44 Q: Is there a role for the private sector in this crisis?
49:25 Krugman solution — ‘creditor adjustment’ — disastrous precedents
54:25 Q: Can China do something to help?
56:10 Q: How can the IMF get it so wrong?