Bryan Caplan and David Henderson

Optimum Currency Areas

A Category Archive (20 entries)
One of the most compelling characters in Adam Smith's work is the person he refers to as "the man of system." Here's Smith's oft-quoted passage from The Theory of Moral Sentiments: The man of system, on the contrary, is apt... MORE

Have a Nice Day

Optimum Currency Areas
Arnold Kling
That is about all that is left to say about the European situation. Clive Crook writes, the only sane choice is to accept the logic of the currency union they created and the obligations that go with it. In the... MORE

Bet on Euro

Optimum Currency Areas
David Henderson
I made a bet with Iain Murray, a delightful guy from the Competitive Enterprise Institute with whom I spoke at a big Hillsdale College event in Atlanta today. We were both speakers on the program. He told me he expected... MORE

Larry Summers on the European Situation

Optimum Currency Areas
Arnold Kling
He writes, At every stage of this process, from the first signs of trouble in Greece, to the spread of problems to Portugal and Ireland, to the recognition of Greece's inability to pay its debts in full, to the rise... MORE

Tyler Cowen on the Euro

Finance: stocks, options, etc.
Arnold Kling
His NYT column is a must-read. The bottom line: the euro, in retrospect, appears to have been a misguided attempt to equalize the values for some very unequal assets, namely the bank deposits of strong countries and those of weak... MORE

The Euro

Optimum Currency Areas
Arnold Kling
Paul Krugman writes a pre-mortem. You still hear people talking about the global economic crisis of 2008 as if it were something made in America. But Europe deserves equal billing. This was, if you like, a North Atlantic crisis, with... MORE

The Euro and Armageddon

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Michael Pettis writes, In my opinion the current set of crises, beginning with the sub-prime crisis in the US and spreading throughout the world, is not a short-term liquidity crisis like LTCM, the Asian Crisis, or the Mexican crisis of... MORE

The State of the European Crisis

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Richard Baldwin and Daniel Gros introduce a set of essays on the crisis in the eurozone. The authors unanimously believe that the crisis is not over, and that the Eurozone rescue is not finished. More needs to be done. I... MORE

Why the European Bailouts?

Optimum Currency Areas
Arnold Kling
The Daily Mail reports, Democracy could 'collapse' in Greece, Spain and Portugal unless urgent action is taken to tackle the debt crisis, the head of the European Commission has warned. That is actually a better story than the more common... MORE

Returned From Europe

Political Economy
Arnold Kling
I just returned from Europe, where I participated in two conferences sponsored by market-oriented think tanks. Some impressions below. (Note: Tyler Cowen has some interesting things to say, blogging from Germany--Tyler and I failed to meet in Berlin, primarily because... MORE

European Monetary and Fiscal Crises

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Sebastian Mallaby and Paul Krugman explain that the PIIGS have monetary as well as fiscal problems. That is, their wages are too high, and there is not enough labor mobility to produce the needed adjustment (hence, as many economists argued,... MORE

Time for Cryptonomicon

Money
Arnold Kling
Martin Feldstein writes, In the end, Greece, the eurozone's other members, and Greece's creditors will have to accept that the country is insolvent and cannot service its existing debt. At that point, Greece will default. Feldstein points out that there... MORE

The Dollar as Anchor

Monetary Policy
David Henderson
Lots of people lately have been talking about how lousy the dollar is as a store of value. I'll repeat the offer I made in a recent book review in Regulation, in response to an economist's claim that government had... MORE

Print More Euros

Optimum Currency Areas
Arnold Kling
Bryan's Euro Bet gets discussed in the Economist blog. There are real issues with the euro; its member states are far from an optimal currency zone, and the problem will only get worse as more members are added (if they... MORE

Euro Bet

Macroeconomics
Bryan Caplan
I made a wager this weekend while I was at a Liberty Fund conference in Chicago. Fellow participant Jeremy Rabkin of Cornell made quite a few predictions about the non-future of the EU that struck me as overconfident. When he... MORE

Friedman Interview

Economics of Education
Arnold Kling
John Hawkins' interview of Milton Friedman touches on many subjects. Friedman is not terribly worried about Social Security. we're a very strong country, lots of able people, lots of active entrepreneurs, and so the Social Security system will be a... MORE

Germany

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
The German economy is in bad shape. Brad DeLong points to a paper by Adam S. Posen that assesses Germany's potential to go into a long slump like Japan. For an advanced economy to perpetually stagnate, its political economy must... MORE

Economic Policy Diversity

Regulation and Subsidies
Arnold Kling
In an essay on diversity in economic policy, I propose dividing the United States. By splitting into the virtual regions of Miltonia and Hillaria, we could run a "natural experiment" to see how things work. Perhaps after ten or twenty... MORE

Should Britain Join the Euro?

Optimum Currency Areas
Arnold Kling
This is a fierce debate. The partisans in favor write, By removing the barriers of separate currencies, the creation of the euro has led to a rapid increase in cross-border trade in the euro-zone. Germany's trade with the EU has... MORE

Optimum Currency Areas

Optimum Currency Areas
Arnold Kling
Martin Feldstein explains why Europe is not an optimum currency area, even though the United States is one. First, American employees move within the country when demand is relatively weak in a particular region, facilitated by a common language and... MORE

Return to top