Author Archives: admin

Will the Fed really be able to carry through with its pledge to begin “tapering” QE from this autumn? Almost certainly not. This means that the higher yields being paid on US debt represent a buying opportunity. It also means that the present moment is a good time to seek exposure to emerging market assets. Ditto […]

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 help Germany, that her present commitments in Germany are enormously less important than those of […]

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

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 confer value on paper money under the gold standard. But what fascinates me about Bitcoin […]

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 together in the early years of the Great Depression. When is a shock large enough […]

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 struggling for growth, a yen-induced export-led Japanese economic recovery might not be enthusiastically received.We are […]

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 stay in the EU. But let’s make it clear right now: membership in the euro-area should […]

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 straightforward. In a world of tradable goods and services, wage competition is a lever against […]

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 well as the least-well-performing East Asia crisis group. For Cyprus, the comparators are all-too-closer, both in […]

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” was followed by robust growth. By contrast, the “internal devaluation” (ID) strategy is to achieve the […]