Essays
Twelve multiples choice questions for teaching the eurozone crisis to macroeconomic beginners
, 09/12/2010
My good friend and colleague Gary Dymski (Economics Professor at University California, Riverside) has sent me 12 multiple choice questions that offer a wonderful training ground for macroeconomic novices. It would be interesting to make our European political leaders take it. How well do you think they would do?
If greed did not cause it, what did?
, 07/12/2010
On Monday 6th December, I gave the keynote speech at a conference near Brisbane, Queensland (Australia) on the theme of Risk Management after the crisis. I was warned that the large audience of professionals (corporate lawyers, chartered accountants, risk managers etc. – people whose jobs I do not really understand) were tough cookies; that nothing […]
The Worst Case Scenario for the Eurozone
, 05/12/2010
And so the nightmare continues. Are we heading for the worst case scenario? To answer this, we must first work out what that is.
Antisemitism's handmaidens
, 02/12/2010
I was recently sent a book that warmed my heart and disturbed my soul. It is entitled Antisemitism: Real and imagined: Responses to the Canadian Parliamentary Coalition to combat antisemitism, edited by Michael Keefer (Waterloo Ontario: The Canadian Charger, 2010). Before I share my thoughts occasioned by reading it, a full disclosure is important:
The Art of the Possible: Or how to blend Eurobonds with Maastricht
, 02/12/2010
Gavyn Davies, in today’s FT (click here) suggests, as we do in our Modest Proposal, that eurobonds are preferable in the fight against the vicious circle facing the eurozone than the current strategy of loaning bankrupt states money they cannot repay under the offered terms. He writes: “[T]he ECB may eventually come to prefer…for the […]
The ECB's expensive folly: A new Maginot Line
, 01/12/2010
Behind the scenes the European Central Bank (ECB) is struggling to construct a barrier that will prevent the firestorm which started in Greece from breaching the Iberian defences and, eventually, from turning to Italy. It is only right and proper that the ECB should try to accomplish this. The only trouble is that the barrier […]
Cutting our noses to spite our faces
, 30/11/2010
The trouble with austerian logic is that it is grossly illogical. It does not even make sense in terms of the logic of microeconomics, let alone that of macroeconomics. Consider the current conundrum facing Greece and Ireland, the eurozone’s set of failed states (so far): Both countries have been forced to slice 10% off government […]
Stiffen your lip Wolfgang!
, 29/11/2010
In today’s Financial Times, Wolfgang Munchau identifies correctly the problem with the current EU strategy for arresting the euro crisis (click here for his article). His proposed solution is also on the ball. Indeed, it is, in substance, very, very similar to our Modest Proposal. However, though he identifies the problem and the essence of […]
Empty threats
, 27/11/2010
25th April 2010: Traders “will Lose Their Shirts’ Betting Against Us.” George Papakonstantinou, Greece’s Finance Minister a week before Greece declared effective bankruptcy and ran for cover into the steely bosom of the IMF-EU loan agreement. 26th November 201: “I should warn those investors who are short selling Spain that they are going to be […]
What will it take to stop the domino effect on its tracks before it reaches Spain and Italy?
, 25/11/2010
Richard Milne asks in today’s FT (click here for the article): What will it take to stop the domino effect on its tracks before it reaches Spain and Italy? He considers two ideas: One is a form of ECB “quantitative easing” under which the ECB massively accelerates its purchases of Spanish and Italian bonds in […]
Unilateral default vs negotiated debt reduction
, 24/11/2010
Michael Burke took me to task for writing, in our Modest Proposal, that it is “utopian to expect member states to default and remain within the eurozone.” Michael asks: “Why? Local, county and state authorities have all defaulted in the US, without having to flee the US Dollar area. Surely default, partial or otherwise, is an […]
The idea of a wholesale attack on private and public European debt is catching on.
, 22/11/2010
It seems that our idea of a multilateral negotiation for reducing the total size of state debt and bank losses is catching on. Here is what Gerald Holtman wrote in the FT today: The problem is that if you force investors to shoulder some of the losses you cannot move one country at a time. […]
A New Versailles Treaty Haunts Europe. (And this time it is not just me thinking so…)
, 21/11/2010
Last May, when the ‘rescue’ package was imposed by the EU and the IMF on Greece, all commentators were talking of a ‘bail out’ for Greece, differing only on whether it was deserved or not. A minority protested that the supposed rescue was bad for Greece, in that it came with some many strings attached […]
Gavan Butler links the East Asian collapse of the late 1990s to the current euro crisis
, 17/11/2010
I just received the following email from my friend and colleague Gavan Butler, in response to my piece on the euro crisis. I think it makes for interesting reading: Dear Yanis. I enjoyed your contribution. It took me back to the debates in the period 2001 to 2003 about what differently might have been done […]