Links for October, 2011

European Doom Loop
by Paul Krugman

The pitfalls of official first-loss bond insurance
by Daniel Gros ©


How badly do you want EFSF first-loss protection?
Posted by Joseph Cotterill on Oct 28 16:42.

Iceland´s Recovery—Lessons and Challenges
Reykjavík, Iceland, October 27, 2011

European Wage Update
 by Paul Krugman

I’ve used Latvian private-sector wages here; there have been big cuts in public-sector wages, which help the budget, but don’t make exports any more competitive.

And what you see is that even the supposed internal devaluation success stories have barely managed to reduce wages. They mainly have to rely on wage increases elsewhere to make their relative wage fall; which is basically why a higher euro zone inflation target would make a big difference.

Let me just add that none of this should come as news. I remember the debates about the desirability of the euro; whenever skeptics tried to point this out, euro advocates replied either with assertions that labor market reform would provide the needed flexibility or that the euro area would not face large asymmetric shocks.

But they were very serious.

China labour costs push jobs back to US

Why Not The Worst? 
by Paul Krugman

Anyway, Iceland is an important example. More about all that in a few days.

China labour costs push jobs back to US
By Peter Marsh

Why is LM still there?
by Matt Rognlie

Confronting the Malefactors
by Paul Krugman

Dexia still bringing stress to a town near you
Posted by John McDermott on Oct 06 14:50.

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