Category Nick Rowe
The Euro, “less competitive countries”, and the neutrality of money
I'm not a great defender of the Euro. I think it was a mistake. But there's one argument against the Euro that I'm not happy with. It goes something like this: "Some of the Eurozone countries are just permanently less productive than others. The less productive countries just can't compete if they all share a […]
The Excess (constrained) Demand for Money
I noticed something a bit strange about the responses to my last post. For the last couple of years I have been writing lots posts saying (in various different ways) that recessions are always and everywhere a monetary phenomena. That Keynesian models do not make any sense except in a monetary exchange economy (which is […]
A response to Paul Krugman
Paul Krugman has a lot in common with quasi-monetarists like me. [Update: I'm going to re-emphasise this. On reading Paul's post, it is now much clearer to me than it was in the past that there is a helluva lot in common between Paul Krugman and quasi-monetarism. So many economists just don't get the central […]
Currency, interest, and redeemability
What makes a central bank special? The Bank of Canada can borrow and lend. So can the Bank of Montreal. So can I. Nothing special there. The Bank of Canada can set any rate of interest it likes when it lends. So can the Bank of Montreal. So can I. Nothing special there. "If you […]
Good and bad currency wars
Canadian Finance Minister Jim Flaherty is concerned that Switzerland's actions to depreciate the Swiss Franc against the Euro could lead to a currency war. But currency wars don't have to be bad; they could be good. It depends on how they are fought. If fought the right way, an invisible hand may lead to a […]
A shotgun wedding for the United States of the Euro?
"Ummm, you know that Free Trade Agreement we signed with the US and Mexico, a while back? And you know we said NAFTA was just a free trade agreement — nothing more? Ummm, well, it turns out we were wrong. Because of NAFTA, if Canada, Mexico, and the US don't now join together into one […]
2 into 17 won’t go
Hans-Olaf Henkel (H/T Larry Willmore) suggests splitting the Eurozone seventeen into two. He wants Germany, Austria, Finland, and the Netherlands to leave the Euro and create their own new common currency. The remaining countries would keep the Euro. I don't think this would work. (But I agree a lot with the other things he says). […]
The Eurozone Tea Party and the Lender of Last Resort
The Tea Party is much more powerful in Europe than in the US. Read Ambrose Evans-Pritchard to see an example. It's just they don't call it the "Tea Party" in Europe. It doesn't seem to have a name over there, but that's what it is.
Recessions are always and everywhere a monetary phenomena
"Inflation is always and everywhere a monetary phenomenon" was Milton Friedman's slogan. It was revolutionary (or counter-revolutionary) when he said it in 1970, but it's now very widely accepted. After all, we make central banks responsible for keeping inflation on target. We do not make fiscal authorities responsible for targeting inflation (unless they happen to […]
Worthwhile Canadian Initiative 
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