Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I think fixed currencies and interest rates make a huge difference to the analysis.

This is not to say that Greece has behaved perfectly, but that the removed degrees of freedom do matter - you can't use international trade analysis tools, the situation is more like analysing differences inside a country.

Of course, "we" as a community have also (rightly!) pushed back strongly on the "profligate welfare" theory because the evidence just isn't there for profligate welfare. Greek levels of welfare spending do not seem to be inherently out of line with their economy. And certainly not deserving of the narrative of "German Ants and Greek Grasshoppers."

Indeed, beyond some level of profligate military spending and some circumstantial evidence of larger than usual (but not proven huge levels) of tax evasion, it's not at all clear where the money went - at least from the discussions with talos and Upstate NY that I have seen.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Jun 9th, 2010 at 04:38:11 AM EST

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