It’s now three years since I suggested a possible route to Greek exit from the euro: a banking crisis, followed by sharp limits on bank withdrawals similar to Argentina’s 2001 corralito, and then — with the panic argument against exit removed — reintroduction of a domestic currency.
Obviously, that hasn’t happened. Despite intense suffering, the Greek political elite’s commitment to the euro has proved incredibly strong. My analysis of the economics wasn’t wrong, but my political guesstimates were off.
Still, Cyprus is now following the first part of the script. And let me ask again: what, exactly, is the point of remaining on the euro? The convenience and efficiency of a single currency is gone; meanwhile, the future for Cyprus on the euro is one of years of grinding deflation and catastrophic austerity. Is the hope of someday, somehow restoring the status quo ante enough to justify all of this?
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How bad have things gotten? How did we get stuck in what now can only be called a depression? And, most of all, how do we free ourselves? A call-to-arms from Paul Krugman.
Some links to stuff I’ve written bearing on macroeconomic policy. Read all of them, and you’ll have a good sense of where I’m coming from.
Recent Columns
By PAUL KRUGMAN
Dealing with love-’em-and-leave-’em investors.
By PAUL KRUGMAN
From the way things are going with Cyprus, you’d think the financial crisis didn’t teach our leaders anything.
By PAUL KRUGMAN
From the reaction to Paul Ryan’s latest cruel joke of a budget proposal, it seems as if Washington is finally getting serious about fiscal policy.
By PAUL KRUGMAN
There is no need for America’s long-run fiscal concerns to drive its budget policy today.
Archive
Recent Posts
March 28
Cyprus goes Argentine.
March 28
Budget and trade, different stories.
March 27
Got that covered.
March 27
But it can still be arranged.
March 27
The pain is coming either way.
From the Opinion Blogs
Yes, animus, fear and dislike motivated Congress to pass the 1996 Defense of Marriage Act. Continue reading →
Something must be rotten with the state of Indian politics when officials from the beleaguered Congress Party are delighting at their allies’ setbacks. Continue reading →
Obviously, that hasn’t happened. Despite intense suffering, the Greek political elite’s commitment to the euro has proved incredibly strong. My analysis of the economics wasn’t wrong, but my political guesstimates were off.
Still, Cyprus is now following the first part of the script. And let me ask again: what, exactly, is the point of remaining on the euro? The convenience and efficiency of a single currency is gone; meanwhile, the future for Cyprus on the euro is one of years of grinding deflation and catastrophic austerity. Is the hope of someday, somehow restoring the status quo ante enough to justify all of this?
Search This Blog
Book
How bad have things gotten? How did we get stuck in what now can only be called a depression? And, most of all, how do we free ourselves? A call-to-arms from Paul Krugman.
Some links to stuff I’ve written bearing on macroeconomic policy. Read all of them, and you’ll have a good sense of where I’m coming from.
Recent Columns
By PAUL KRUGMAN
Dealing with love-’em-and-leave-’em investors.
By PAUL KRUGMAN
From the way things are going with Cyprus, you’d think the financial crisis didn’t teach our leaders anything.
By PAUL KRUGMAN
From the reaction to Paul Ryan’s latest cruel joke of a budget proposal, it seems as if Washington is finally getting serious about fiscal policy.
By PAUL KRUGMAN
There is no need for America’s long-run fiscal concerns to drive its budget policy today.
Archive
Recent Posts
March 28
Cyprus goes Argentine.
March 28
Budget and trade, different stories.
March 27
Got that covered.
March 27
But it can still be arranged.
March 27
The pain is coming either way.
From the Opinion Blogs
Yes, animus, fear and dislike motivated Congress to pass the 1996 Defense of Marriage Act. Continue reading →
Something must be rotten with the state of Indian politics when officials from the beleaguered Congress Party are delighting at their allies’ setbacks. Continue reading →
