The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
[proof needed] - and in Europe.
There is nothing sufficiently unique about Europe to exempts us from simple accounting relations. Cycle-averaged balanced budgets in a nominally growing economy impose an upwards unemployment bias by withdrawing fiat-money purchasing power from the economy, relative to the demand for fiat-money purchasing power.
Was French unemployment worse in 93-08 than it was in 78-93? Growth? General state of the economy?
Both of those periods are dominated by intra-European fixed-rate ForEx regimes (the ERM between '79 and '93, the EMU between '98 and '08), so you can hardly use a comparison between the two to test a hypothesis on the influence of floating versus fixed exchange rates.
I am not contesting that repeated devaluations in a fixed exchange rate system is a poor policy. This is, I believe, a theoretically well founded and clearly empirically validated conclusion. My contentions are that
Simple inspection suggests that the 1993 devaluation was much less painful than the 2008 austerity, but in order to make a compelling case one would have to compare the magnitude of the required exchange rate adjustments to achieve real exchange rate parity with the one's choice of indicators of economic performance. I don't have 1993 price level, unemployment and exchange rate data on hand for these countries, but if you're really interested I can probably get them and run the numbers.
Austerity can only be implemented in the shadow of a concentration camp.
by Frank Schnittger - Jul 21 67 comments
by afew - Jul 21 14 comments
by gmoke - Jul 21 4 comments
by Migeru - Jul 17 54 comments
by Frank Schnittger - Jul 16 61 comments
by Oui - Jul 19 4 comments
by Oui - Jul 23 3 comments
by DoDo - Jun 12 29 comments
by Oui - Jul 233 comments
by Frank Schnittger - Jul 2167 comments
by gmoke - Jul 214 comments
by afew - Jul 2114 comments
by Oui - Jul 194 comments
by Migeru - Jul 1754 comments
by Frank Schnittger - Jul 1661 comments
by Oui - Jul 623 comments
by Oui - Jul 41 comment
by afew - Jul 248 comments
by gmoke - Jul 15 comments
by Oui - Jul 17 comments
by Frank Schnittger - Jun 3055 comments
by gmoke - Jun 2813 comments
by Oui - Jun 251 comment
by ceebs - Jun 244 comments
by Oui - Jun 241 comment
by DoDo - Jun 236 comments
by DoDo - Jun 1229 comments