Referring to the argument that, Hey, we have a problem of too much debt. You can’t solve it by adding more debt. See Krugman versus the UK government on BBC Newsnight for a recent example (go to 39:00). 1. Reject the premise — that our problem is “too much debt”. Our problem is not too much debt […]
Category Archives: Uncategorized
Un-learning the lessons of Great Depression (ad-infinitum)
This blog is full of lessons-unlearned since the Great Depression. Why so? Because, fortunately or not, I’ve spent a portion of the last several years working on the Great Depression from a monetary and policy perspective. One of the interesting things about that period is the soul-searching it occasioned. This soul-searching is a good place to […]
Abenomics
Abenomics (noun): The use of macro policy to stimulate the economy. See also “Keynesianism”. Japan’s newfound enthusiasm for macro policy is going to provide a helluva interesting real-life test of the competing notions over whether OECD governments are doing too much or too little to tackle anaemic growth rates. My guess is that the austerians will have […]
A macroeconomic union
The euro’s main political effect is to drive a wedge through the EU, something not yet fully understood by the bloc’s policy establishment. The vast majority of insiders still treat it as a regulatory organisation at its heart, rather than as a macroeconomic union.Wolfgang Münchau in today’s FTProps to Münchau for putting so succinctly a sentiment I’ve […]
Pathways out of the euro-zone crisis
Lecture presented to the Georgetown University Graduate Program in International Management (Oxford, August 2012).Slides (pdf)Audio (mp3)Audio TOC:0:00 Introduction, Plan of the talk1:00 Real exchange rate4:10 Purchasing Power Parity6:05 East Asia crisis10:37 Hong Kong is the exception14:20 Financial globalization16:45 Internal devaluation in Argentina20:00 Greece23:10 Pathways out of the crisis25:10 De-globalization in Europe?26:41 Monetary trilemma28:38 History Lesson: […]
Crisis devaluations
Still thinking about a euro-area breakup. The question for this project is: For a given current account deficit and prior real appreciation, how big is the devaluation?The dataset contain 36 devaluation episodes, all of which featured a minimum 15% nominal depreciation over six months less-than-fully offset by inflation (i.e. a real depreciation). They are all […]
Thinking about a eurozone breakup
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 […]
Re-creating the Great Depression — interview with Amber Murrey (mp3)
Podcast (7 minutes)
The euro and the Great Depression – conference presentation slides (PDF)
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 (Conference paper)
The gold standard and the euro-area (pdf).