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Gene Ellis

Mario Draghi Cannot Save the Euro - Bloomberg - 0 views

www.bloomberg.com/...aghi-cannot-save-the-euro.html

Simon_Johnson

shared by Gene Ellis on 06 Aug 12 - No Cached
  • Once you have understood that the ECB does not necessarily stand behind euro-area government debt, it is hard to disabuse yourself of the notion.
  • A broader question is what, if anything, Draghi might achieve with a looser monetary policy.
  • The euro area has many problems, including a lack of competitiveness in the periphery, chronically poor growth in countries such as Portugal and Italy, deeply damaged public finances in Greece and Spain, and a labor force that’s not mobile enough to go where the jobs are. Which of these could be resolved by reducing interest rates across the board?
  • ...4 more annotations...
  • Maybe Draghi’s policies can buy time for deeper “structural changes” in the periphery, although quite what those are and what difference they would make in the near term remains elusive
  • It’s hard to see how providing politicians in troubled countries with unlimited credit will increase the likelihood of real reform of any kind.
  • More likely, a shift in ECB policies would make the European situation uglier. For one, Draghi would essentially be conceding fiscal dominance, demonstrating that if governments run budget deficits, they can count on the central bank to finance them.
  • Perhaps Draghi is planning the same game with fiscal authorities that the Banca d’Italia used to play with Italian politicians in the 1980s and early 1990s -- keep interest rates low enough to prevent fiscal collapse, yet high enough to keep fiscal prudence as a priority. Make no mistake about it, inflation or not, this is a strategy of high real interest rates.
  • Gene Ellis on 06 Aug 12
     
    Simon Johnson article - good
Gene Ellis

http://www.irpp.org/po/archive/may01/friedman.pdf - 0 views

www.irpp.org/...friedman.pdf

Friedman Mundell euro

shared by Gene Ellis on 01 Aug 12 - No Cached
  • Gene Ellis on 01 Aug 12
     
    Bob Mundell and Milton Friedman discuss/debate the euro
Gene Ellis

Crash of the Bumblebee - NYTimes.com - 0 views

www.nytimes.com/...an-crash-of-the-bumblebee.html

shared by Gene Ellis on 30 Jul 12 - No Cached
  • Gene Ellis on 30 Jul 12
     
    Krugman - the fate of the euro nyt
Gene Ellis

Seven lean years for Europe, says Citi chief economist - Fund Forum - Investment Europe - 0 views

www.investmenteurope.net/...iti-chief-economist-fund-forum

shared by Gene Ellis on 23 Jul 12 - No Cached
  • Gene Ellis on 23 Jul 12
     
    Buiter
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