Obstfeld and Rogoff have a new paper on this important topic.
Month: October 2009
Greg Mankiw has scooped a pre-release of next week’s announcement.
Menzie Chinn argues that there has been a structural break here. In other words, the decline in world trade can’t simply be explained by falling income: something more is going on. Amiti and Weinstein provide very interesting Japanese evidence in favour of the view that the something more is trade finance.
Today’s Irish Times carries an interview with Joseph Stligitz. A striking element is his advocacy of a uniform cut in wages and prices (the internal devaluation option), as the substitute for the nominal devaluation strategy that has been pursued by several countries with independent currencies. He also highlights the importance of fairness in pursuing this option. While he does not describe in detail how this can be achieved, my own work has advocated a twin-track strategy: wage reductions, coupled with more vigorous pro-competition policies to ensure that wage cuts are not simply absorbed into higher markups.
Colm is not impressed in today’s Irish Times
This continues the earlier discussion in this house
He also comes out in favour of a carbon tax, which I discuss at another page of the same newspaper