Category Archives: EZ

Paul Krugman: Rationality and the Euro


  Simon Wren-Lewis, for once, has a happy story to tell. He looks back at Britain’s fateful decision, ten years ago, not to join the euro, and argues that the decision was made on the basis of — gasp! — … Continue reading

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Paul Krugman: The Triumph of Peter Kenen, The Revenge of Robert Mundell


In America, it’s sad when your friends move away; in Europe, it may be a tragedy. Back in the 1960s, a new concept emerged in international macroeconomics: optimum currency area theory. The question it sought to answer was, when should … Continue reading

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Paul Krugman: Procyclical Policy for Germany


  OK, like Brad DeLong, I’d like to move on. Let’s stipulate that: 1. I am a big meanie2. Reinhart and Rogoff never should have claimed that there is some kind of critical threshold at 90 percent, and they certainly … Continue reading

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Wolfgang Münchau: The riddle of Europe’s single currency with many values


  … In a monetary union, adjustment can only occur through though real movements in wages and prices. Since Germany is not inflating, and is not likely to inflate in the future, I see no chance of that happening, even … Continue reading

Posted in EZ, FT.com, Wolfgang Münchau | 2 Comments

Paul Krugman: One Size Fits None


  In today’s Business Insider, Joe Weisenthal reports on Europe’s truly dismal PMIs (survey-based indexes that act as early-warning indicators for official economic data). There’s no doubt at all that the continent is falling deeper into recession, even in the … Continue reading

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Paul Krugman: Hot Money Blues


  Whatever the final outcome in the Cyprus crisis — we know it’s going to be ugly; we just don’t know exactly what form the ugliness will take — one thing seems certain: for the time being, and probably for … Continue reading

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Paul Krugman: Cyprus, Seriously


  A correspondent whom I respect has (gently) challenged me to say plainly what I think Cyprus should do — leaving aside all questions about political realism. And he’s right: while I think it’s OK to spend most of my … Continue reading

Posted in Cyprus, Euro, EZ, Paul Krugman | 1 Comment

Paul Krugman: Pessimal Currency Area Theory


  Sorry about the one-day interruption in service — I forgot to mention that it was a travel day, and as it turned out I was too tired on arrival to blog or actually do anything. And with that, back … Continue reading

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Paul Krugman: Ireland Recovers, and Recovers, and Recovers


  March 2010: “Greece has a role model, and that model is Ireland” — Jean-Claude Trichet December 2011: “As European leaders scramble to overcome the Continent’s debt crisis, many are pointing to Ireland as a model for how to get … Continue reading

Posted in ECB, Europe, EZ, Ireland, Paul Krugman | 1 Comment

ECB’s monetary policy can’t just be good for Germany.


  BERLIN, GERMANY – OCTOBER 24: Mario Draghi, President of the European Central Bank, and Bundestag President Norbert Lammert speak to the media at the Bundestag after Draghi spoke to German parliamentarians on October 24, 2012 in Berlin, Germany. Photo … Continue reading

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