euro area

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 […]


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 […]


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 […]


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!


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 […]


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 […]


“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 […]


Money Supposedly Became Fiat And Hence Balance Of Payments Does Not Matter Kind Of Argument

20 November 2012

So Karl Whelan wrote another article on TARGET2 claiming once more that a loss of TARGET2 claims of the Bundesbank does not matter at all to Germany. He has a new paper as well. Earlier he was arguing there was no loss at all. His argument roughly is that since there is no longer trade […]


Nicholas Kaldor On European Political Union

6 November 2012

It is sometimes said that a fiscal union would be the best solution to the Euro Area crisis – perhaps it is the only solution. Indeed while the German leaders Angela Merkel and Wolfgang Schäuble have been trying to promote “more Europe” to achieve this objective, their plan is still defective since it is likely to […]


Not A Balance-Of-Payments Crisis?

27 October 2012

Here’s a new piece by Randall Wray on Economonitor claiming current accounts do not matter (once again!) and didn’t have much of a role on the Euro Area crisis. Part of his arguments are the same as those who participated in public debates 1991 (most, not all) and claimed the balance-of-payments doesn’t matter. Perhaps he should […]