euro area

Federal Government And Regional Balance Of Payments

25 July 2015

The Financial Times has a column titled Europe’s Fiscal Union Envy Is Misguided. The author echoes a recent article in The New York Times (referred here in my blog). According to the FT columnist, in the United States, … The bulk of the risk-sharing happens through credit and capital markets – that is to say, private lending, borrowing and investment returns do […]

READ MORE >>

Ben Bernanke Embracing Heterodox Ideas

18 July 2015

It’s remarkable how some economists were ahead of the time, while others such as Ben Bernanke seem to just catch up. In a recent post on his blog Ben Bernanke gives out some unorthodox ideas to resolve the Euro Area crisis. Ben Bernanke says: … Germany’s large trade surplus puts all the burden of adjustment on countries […]

READ MORE >>

Is A Fiscal Union Expensive For Its Rich Members?

10 July 2015

Josh Barro writing for The New York Times claims that a fiscal union for the Euro Area will be an enourmous expense for its rich members. Fiscal union would fix the euro permanently — but at enormous expense to its rich members. So it won't happen. http://t.co/naXIp75vIz — Josh Barro (@jbarro) July 10, 2015 He cites […]

READ MORE >>

Derailed: Wynne Godley On The Euro Area

20 February 2015

I am in favour of Britain having much closer ties with other European countries, provided that appropriate institutions are created and the whole thing is brought under effective political control. But I have never been able to understand what it is that those who support the Maastricht Treaty think they are going to get out […]

READ MORE >>

JKH On Paul De Grauwe’s Fiscal Arithmetic

21 January 2015

In a recent article for VOX, Paul De Grauwe and Yuemei Ji write about potential fiscal effects of a possible asset purchase program by the Eurosystem (European Central Bank and the National Central Banks in the Euro Area). In that the authors take an extreme stand suggesting that a default by a Euro Area government […]

READ MORE >>

Kenneth Rogoff Is Back With Another Sneaky Article

23 May 2013

Kenneth Rogoff is back with more unscholarly stuff. In a new article for Project Syndicate Europe’s Lost Keynesians, Rogoff subtly tries to belittle Keynesians and Keynes himself. According to him, The eurozone’s difficulties, I have long argued, stem from European financial and monetary integration having gotten too far ahead of actual political, fiscal, and banking union. This […]

READ MORE >>

Euro Area Current Account Balances

17 April 2013

Always helps to look at actual data and remember it. From the IMF’s latest World Economic Outlook: (click to expand) Far away from rebalancing!

READ MORE >>

Cyprus Rescue

30 March 2013

Cyprus has recently received the attention of academicians and financial professionals in recent weeks. Need I say that? So national bankruptcy is to be resolved by winding down a bank, moving guaranteed deposits (i.e., upto €100,000) to another and as per the latest Reuters article on this, big numbers (anywhere ranging from 20 to 40 per […]

READ MORE >>

Mario Draghi – Euro Saviour?

26 January 2013

Recently Mario Draghi, the European Central Bank President, has been going around telling everyone that “fiscal consolidation” is the absolutely essential to resolve the Euro Area crisis, given some positive developments. Although, this view of his is known and this has had a big influence on policy, he has become more and more vocal about […]

READ MORE >>

“Maastricht Is A Half-Baked Half-Way House”

8 December 2012

I frequently quote Wynne Godley’s Maastricht And All That written for the London Review Of Books in 1992. Here’s from another article (paywalled) for the same magazine from 1993: I am in favour of Britain having much closer ties with other European countries, provided that appropriate institutions are created and the whole thing is brought under […]

READ MORE >>