Economics and similar, for the sleep-deprived
A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?
Update: seemingly not
Update: Oh yeah!
Tuesday, October 11, 2011
Hmmm, not a vintage Krugman day
I find myself disgreeing with two posts, oddly:
First. It appears to be my role to be the Sisyphus of people trying to rewrite recent financial history to make the narrative more ethically straightforward. The benefits of EMU were not "equally shared between the core and periphery". Have we forgotten the Celtic Tiger so soon? What about "Old Europe"? There really was no massive benefit to France and Germany to remotely compare with the experience of Spain, Ireland and Greece (Italy, as always, falls half way between stools).
Germany, in particular, can't be expected to follow this sort of reasoning. A forty year old German born in the west has credible reason to believe that his entire working life up until 2008 had been spent paying for the cost of currency unions that mainly benefited other people. An forty year old German born in the East has had about five minutes' time in the sun before being told that the party's over and it's time to pay for the booze that someone else drank. Ireland still has higher per capita GNP and median income than France, by the way.
The case for Germany and France picking up the bill for keeping the single currency together, and alleviating the costs of Greece servicing its debt burden, is powerful. But it's never going to be made if it's to depend on the French and German electorate being somehow convinced that they profited out of EMU, at the expense of Greece and Ireland. Is it? Once more, as I said before in a more obscure venue, the case for solidarity and egalitarianism has to be based on solidarity and egalitarianism, not on some idea of theft.
The second one is more of a quibble; Prof K is basically right about all of this, but it's a real shame that he's citing Diamond & Dybvig (1983), rather than "Lombard Street", which is a great book.
this item posted by the management 10/11/2011 09:06:00 AM