Author Archives: admin

This project draws on post-Bretton Woods history of large-scale currency moves. Each observation marks the date at which the currency collapsed or went from slow fall to freefall. The penultimate column is the change in the nominal exchange rate over the following  months. The final column is the cpi inflation rate from the breakup plus […]

Podcast (7 minutes)

Here are my slides (pdf) from the talk I gave at the euro-crisis conference in Bayreuth, Germany in January 2012. And here are some reflections upon that conference: 1) Heads in the sand Most people said “The current route (internal devaluation) isn’t working” and also “nothing else is possible — especially external devaluation”. 2) Key […]

The gold standard and the euro-area (pdf).

From the Financial Times, 28 May 2010: But the alternative to [Greek debt] restructuring [i.e. default/re-profiling/haircut/etc.] will probably be grim too. If Greece staggers on, without a miracle, fears about future “haircuts” will continue to poison the bond markets and interbank world. That will essentially produce a pattern similar to Japan in the late 1990s: […]

This is an extract from my post of 29 May 2010 — critiquing Europe’s ‘Plan A’ for Greece.  Plan B starts from the assumption that Plan A won’t work; that Greece will arrive at year 2013 still insolvent. The economy has contracted sharply so the external debt is even less sustainable. These adverse dynamics all the […]

I’ve argued since May 2010 that Greek travails — the debt dynamics, the dogmas, the policy response — revealed a situation all-too-similar to the breakdown of the interwar period’s fixed-rate monetary regime. The very short story of that episode is that, when capital flows to some European economies suddenly halted, the troubles which beset euro-area […]

Judging from comments on a popular right-wing UK newspaper blog, efforts to rescue the euro augur something  sinister. The essence of this view is that, in order for the common currency area to be sustainable, the sovereignty of the member economies must be sharply curtailed. The deal agreed at the EU summit last week indeed […]

The argument here is that some countries in Europe are further from the liberal-democratic, social-market end-state than others. Crudely: some states have not reached the ‘end of history’, as Fukuyama put it. When you read about the Greek crisis exposing sub-optimal tax collection, inefficient bureaucracy, state corruption, closed-shop professions, inflexible or under-the-table labour markets, you […]

Italian bond yields reflect decisions announced at the 27 October EU summit — namely, that new Italian bond issues might carry first-loss insurance. If that’s the case, investors would rather hold those new bonds than the existing secondary market bonds. Which means there will be a wedge between the secondary market Italian bonds and the […]