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.
Friends come and go. Enemies accumulate.
by Cat - Feb 18 1 comment
by ATinNM - Feb 6 22 comments
by Oui - Feb 12 16 comments
by Oui - Jan 26 2 comments
by Oui - Feb 14 1 comment
by gmoke - Feb 13
by Frank Schnittger - Feb 5 10 comments
by Frank Schnittger - Feb 2 54 comments
by Cat - Feb 181 comment
by Oui - Feb 173 comments
by Oui - Feb 141 comment
by gmoke - Feb 13
by Oui - Feb 1216 comments
by Oui - Feb 12
by Oui - Feb 86 comments
by Oui - Feb 71 comment
by ATinNM - Feb 622 comments
by Frank Schnittger - Feb 510 comments
by Oui - Feb 42 comments
by Frank Schnittger - Feb 254 comments
by Cat - Feb 18 comments
by Oui - Feb 1
by Oui - Feb 129 comments
by Oui - Jan 302 comments
by Frank Schnittger - Jan 2936 comments
by Frank Schnittger - Jan 2810 comments
by Oui - Jan 262 comments
by Oui - Jan 2515 comments