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.
That is the immediate question. I say that isn't the case and Jake tries to disprove this by talking about what happens with a CA deficit and no nominal growth in infinite time period.
It would really make this discussion a lot easier if you would make the effort to recall the chain of reasoning back more than three posts when you play these annoying "gotcha" games.
A straw man, since I am talking about right now.
Which just proves you don't know the first thing about how to look at macroeconomic data. To obtain an estimate of the structural surplus/deficit, you have to average over at least a couple of business cycles.
You are arguing like a climate change denier who says "but we had a really cold winter in 1992, so global warming isn't happening!"
And of course a small CA deficit is sustainable about a long time period. The data you researched regarding Germany show that Germany had a CA deficit from 1990 until 2002 without any trouble.
From 1991 to 2001, actually. And that's not a long time period. It's the trough-to-peak of the 1990s business cycle.
It would also be more informative to look at the CA position of the former West Germany only, since there was a considerable exodus of industry from the former Eastern Bundesländer under the Kohl Ostmark peg that strongly resembles the exodus from the European periphery under the Schröder Drachma peg.
So my thesis is that a moderate CA deficit like France or Slovakia or Italy is no reason for worry.
And since France and Italy are already under attack, your hypothesis was falsified even before you proposed it.
As fail goes, that's a really impressive example.
- Jake Friends come and go. Enemies accumulate.
And you are destroying your own argument. I won't even mention that as usual you don't know the slightest thing about german economic history. If we look at structural deficits and surpluses, the german CA surplus you obsess about vanishes. More importantly, there isn't much of a CA deficit in France or Italy. Or Ireland. And before you start again babbling - climate science? Case of physics envy? - if we are only talking about six or seven countries, two or three countries are more then an isolated data point.
Where have you spent the month of August? Economics is politics by other means
Under attack? Define that.
You are under attack when your risk-free secondary market spread against the lowest rate in the currency zone is statistically distinguishable from zero.
In a unified currency zone, all subunits should be operating under the same risk-free rate. If they aren't, there is an implied exchange rate risk.
I won't even mention that as usual you don't know the slightest thing about german economic history. If we look at structural deficits and surpluses, the german CA surplus you obsess about vanishes.
In which fictional alternative universe?
Try averaging over the last three business cycles and get back to me.
More importantly, there isn't much of a CA deficit in France or Italy. Or Ireland.
I never claimed that Ireland was a currency crisis, and you should fucking well know that by now if you are arguing in anything that remotely resembles good faith.
And France and Italy have structural CA deficits, which means, given that the ECBuBa is pursuing a long rate in excess of nominal growth, that they are vulnerable to Soros attacks.
if we are only talking about six or seven countries, two or three countries are more then an isolated data point.
But you only have one country. Not two, nevermind three.
In other words, everybody is attacked.
"In a unified currency zone, all subunits should be operating under the same risk-free rate." Why? What about default risk?
"In which fictional alternative universe?
Try averaging over the last three business cycles and get back to me."
You really seem to think germanys economic history started in 2002. It hasn't. And prior to that the CA tended to be balanced.
"I never claimed that Ireland was a currency crisis, and you should fucking well know that by now if you are arguing in anything that remotely resembles good faith." You can't handle dissent well. You claimed a perfect prediction record for your hypothesis, I pointed out that Ireland doesn't fit your hypothesis and you then grudgingly admitted that. Where exactly is the bad faith? You just omitted Ireland in your first comments.
"You are under attack when your risk-free secondary market spread against the lowest rate in the currency zone is statistically distinguishable from zero." In other words, everybody is attacked.
No. Finland is not under attack.
Only relevant to the private part of the foreign debt, which is why I was talking about the "risk-free" rate.
"In which fictional alternative universe? Try averaging over the last three business cycles and get back to me." You really seem to think germanys economic history started in 2002.
You really seem to think germanys economic history started in 2002.
"The last three business cycles" is 1985 to 2008 (approx.).
You do know what "business cycle" means, right?
"I never claimed that Ireland was a currency crisis, and you should fucking well know that by now if you are arguing in anything that remotely resembles good faith." You can't handle dissent well. You claimed a perfect prediction record for your hypothesis, I pointed out that Ireland doesn't fit your hypothesis and you then grudgingly admitted that.
There was nothing grudging about that. I pointed out from the first day that Ireland and Greece were totally and fundamentally different. This is not a problem for my hypothesis, any more than the existence of suicide is a problem the prosecutor in a case against a suspected serial killer.
Why? What about default risk?
1. What about the Eurozone's "no-default rule"?
You can't have your cake an eat it, too. The combination of the following is an example of having your cake and eating it, too:
All of this could have been solved very simply and cheaply in February 2010 but it wasn't. Economics is politics by other means
by Oui - Jan 20 51 comments
by Frank Schnittger - Jan 14 52 comments
by Frank Schnittger - Jan 24 1 comment
by Oui - Jan 23 10 comments
by gmoke - Jan 22 2 comments
by Oui - Jan 10 61 comments
by Oui - Jan 21 10 comments
by IdiotSavant - Jan 15 20 comments
by Frank Schnittger - Jan 241 comment
by gmoke - Jan 24
by Oui - Jan 2310 comments
by gmoke - Jan 222 comments
by Oui - Jan 2110 comments
by Oui - Jan 2051 comments
by Oui - Jan 2011 comments
by Oui - Jan 172 comments
by Oui - Jan 1610 comments
by gmoke - Jan 16
by IdiotSavant - Jan 1520 comments
by Oui - Jan 1445 comments
by Frank Schnittger - Jan 1452 comments
by Oui - Jan 1389 comments
by Oui - Jan 1177 comments
by Oui - Jan 1061 comments
by Frank Schnittger - Jan 877 comments
by Oui - Jan 772 comments
by Frank Schnittger - Jan 710 comments
by Frank Schnittger - Jan 668 comments