euro area

Sergio Cesaratto On TARGET2 Balances

3 October 2015

Sergio Cesaratto has posted a reply on Matias Vernengo’s blog, replying to a paper by Marc Lavoie on economic problems of the Euro Area For previous discussions, see the citations in that post or see my previous post on this. Marc’s point is that because TARGET2 allows unlimited and uncollateralized credit/debit facilities between Euro Area […]


Sergio Cesaratto’s Debate With Marc Lavoie On Whether The Euro Area Crisis Is A Balance-Of-Payments Crisis – II

14 September 2015

This is a continuation of the post from the end of 2014, although reading that isn’t necessary.  In a new paper, Marc Lavoie continues his debate with Sergio Cesaratto on whether the Euro Area crisis is a balance-of-payments crisis or not. For the sake of completeness, here’s the list of papers, with references copy-pasted from Marc’s […]


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 […]


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 […]


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. — Josh Barro (@jbarro) July 10, 2015 He cites […]


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 […]