The story teaches us that the rules governing the single European currency are not based on economic considerations …
The ECB should focus on growth, not just inflation!
The European Central Bank (ECB) plan to lower the official interest rate from 0.15% to 0.05% will not work. What’s the difference between 0.05% and 0.15%? Nothing. There will be no increase in requests or approvals for loans resulting from this 0.1% cut. In July 2012, after lowering the interest rates from 1% to 0.75%, Mario […]
On Principles and Taboos
Major financial crises have always left huge amounts of debt in their wake, followed by incidents of nonpayment. Occasionally the reduction of debt has been concealed, as in the case of Germany, which, thanks to an annual inflation that averaged 17% from 1913 to 1950, reduced the value of its domestic debt to almost zero. […]
A New Monetary Policy?
After the injection of capital announced by Mario Draghi, President of the European Central Bank (ECB), I stopped to reexamine what I knew about monetary policy and what I believe I know now. What conclusion did I reach? At first I thought, “This is not the monetary policy that I studied and have taught for […]
Is Spain Better than a AAA Rate?
For the first time since the beginning of the crisis, the Spanish government faces lower borrowing costs that the U.S. …
