Category Archives: Macroeconomic policy

Ilargi: Russia’s Central Bank Governor Is Way Smarter Than Ours

Just like the Bank of England hired Mark Carney from Canada, maybe our central bank, the Fed, should hire Elvira Nabiullina from Russia?

Jeffrey Sommers: Comparing Apples to Oranges: The Baltic States and Greece

Greece’s crisis is a public debt crisis enabled by membership in the Eurozone. The Baltic crisis was a private sector property bubble crisis.

Secular Stagnation and Capital Flows

Can capital flows mitigate or even eliminate the problems generated by secular stagnation?

Greece Submits Insufficiently Detailed Reform List; Tsipras Tells Parliament of “Peace with Honor,” Um, “Honorable Compromise”

The Greek government continues to climb down substantively on its promises of resistance to the dictates of its creditors as time pressure intensifies.

Maya MacGuineas of Fix the Debt’s Profound Fiscal Irresponsibility

Budget season brings out the deficit/debt burden propagandists, and Maya MacGuineas of Fix the Debt is a prominent fixture. Sadly, her type needs to be debunked often.

Negotiations with Greece Close to Breakdown as Budget Strains Worsen

Things are not looking good for Greece.

Yanis Varoufakis: Presenting an Agenda for Europe at Ambrosetti

If you followed Yanis Varoufakis before he became a household word (at least in Europe and in finance circles), you’ll recognize that he is making a layperson-friendly case for the Eurozone reforms that he, Stuart Holland, and Jamie Galbraith call A Modest Proposal. A new wrinkle is that he argues that the scarcity of bonds eligible for QE argues for one of its ideas, infrastructure spending funded by the EIB (those bonds would presumably be eligible for QE purchases).

Bernie Sanders Blasts “Robin Hood in Reverse” Subsidies to the Rich, Calls for Full Employment

Bernie Sanders gave a forceful, if sobering, assessment of the state of the economy from the perspective of working men and women, as well as retirees, and focused on the hypocrisy of corporations and the wealthy that poor-mouth as a way to extract even more subsidies and tax breaks.

Penciling Out Greece’s Payment Deadlines and Budget Needs

Yves here. Unlike many other comments on the state of Greece’s finances, this post takes a stab at Greece’s ongoing budget needs as well as its various debt due dates. Note that one uncertainty flagged here has been resolved in Greece’s favor. The Greek government will receive €550 million this month from the Hellenic Financial Stability Facility.

Rob Parenteau: Why Understanding Money Matters in Greece

As Greece staggers under the weight of a depression exceeding that of the 1930s in the US, it appears difficult to see a way forward from what is becoming increasingly a Ponzi financed, extend and pretend, “bailout” scheme. In fact, there are much more creative and effective ways to solve some of the macrofinancial dilemmas that Greece is facing, and without Greece having to exit the euro. But these solutions challenge many existing economic paradigms, including the concept of “money” itself.

Do Greece, the Troika, and the Eurogroup Actually Have a Deal?

Ambrose Evans-Pritchard has a new article on Greece’s scramble to find the funds to meet it March IMF payments, which are €1.5b in total, with €300 due on Friday. Note that IMF payment dates aren’t as hard and fast as credit card due dates; the agency allows borrowers some leeway if they have a clear intent to pay.

Nevertheless, Evans-Pritchard’s most important observation may be the one at the close of his article:

Whatever piece of paper they signed in Brussels 10 days ago, the two sides are still talking past each other.

In other words, the two sides disagree profoundly as to what the memo means. And that may mean that in reality, there is no deal at all.

The Alternative in Greece

Let us begin with what should be indisputable: the Eurogroup agreement that the Greek government was dragged into on Friday amounts to a headlong retreat.

Mathew D. Rose: Greece – Dead Man Walking

Rose focuses on an issue that reader Swedish Lex and other have pointed out: the heavy-handed actions of Germany in the tempestuous negotiations between the Eurozone and Greece have wound up being a major own goal.

But the bigger issue that Rose raises is that last week’s ugly negotiations, in combination with the fiasco in Ukraine, is exposing Germany as a lousy hegemon, which he argues is producing a political crisis in Germany and fracture lines in Europe.

Greece, Its International Creditors and the Euro

his is an excellent background piece on how Greece got where it is and how its various bailouts were structured. It also helps explain the past and current roles the various members of the Troika play and discusses the prospects for Greece achieving its aims.