Source: Nicholas Bloom (2014) – all data at www.policyuncertainty.com. Data normalized to 100 prior to 2010.
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Economic policy uncertainty in the European Union
01 Dec 2014 1 Comment
in Euro crisis, global financial crisis (GFC), great recession, macroeconomics Tags: euro crisis, regime uncertainty
Avoiding Lost Decades: European Edition | Econbrowser
29 Nov 2014 Leave a comment
in economic growth, Euro crisis, global financial crisis (GFC), great recession, macroeconomics Tags: euro crisis, Euroland
Europe’s investment still in limbo.
25 Nov 2014 Leave a comment
in Euro crisis Tags: Euro
#Europe's investment still in limbo. @Bruegel_org @EIBtheEUbank @EBRD @wef @WorldBank bruegel.org/nc/blog/detail… http://t.co/pq8vW4GFQd—
Dr. Mario (@RomanianRomance) November 25, 2014
US corporate earnings vs. European corporate earnings
19 Nov 2014 Leave a comment
in Euro crisis, great recession, macroeconomics, politics - USA Tags: Euroland, GFC, great recession
The Greek great depression
15 Nov 2014 Leave a comment
in Euro crisis, global financial crisis (GFC), great depression, great recession, macroeconomics, politics Tags: euro crisis, Euroland, Greece
Europe’s dismal economy
15 Nov 2014 Leave a comment
in applied welfare economics, business cycles, Euro crisis, global financial crisis (GFC), great recession, macroeconomics Tags: Euroland, Euros crisis
Romer and Romer vs. Reinhart and Rogoff – MoneyBeat – WSJ
01 Nov 2014 Leave a comment
in business cycles, Euro crisis, global financial crisis (GFC), great depression, great recession, macroeconomics Tags: financial crises, GFC
Identifying financial crises after the fact is problematic: researchers will disagree on what their characteristics were, when they started and ended, and what actually counts as a crisis. This is particularly true of crises before World War II or involving developing economies, for which accurate data are harder to come by.
So the Romers created a measure of financial distress based on real-time accounts of developed-economy conditions prepared semiannually by the Organisation for Economic Co-Operation and Development between 1967 and 2007. And to check that the OECD wasn’t for some reason off-base on conditions, they crosschecked it with central bank annual reports and articles in The Wall Street Journal.
They then scored the severity of financial conditions from zero to 15, thus avoiding quibbles over what is and isn’t a crisis and allowing for more precise readings of economic effects.
Their finding: Declines in economic output, as measured by gross domestic product and industrial production, following crises were on average moderate and often short-lived. There was a lot of variation in outcomes, so there was nothing cut and dried about how economies respond to crises…
via Romer and Romer vs. Reinhart and Rogoff – MoneyBeat – WSJ.
Romers’ work suggests the poor performance of economies around the world in the wake of the 2008 financial crisis shouldn’t be cast as inevitable. In The Current Financial Crisis: What Should We Learn From the Great Depressions of the 20th Century? de Cordoba and Kehoe note that:
Kehoe and Prescott [2007] conclude that bad government policies are responsible for causing great depressions. In particular, they hypothesize that, while different sorts of shocks can lead to ordinary business cycle downturns, overreaction by the government can prolong and deepen the downturn, turning it into a depression.
Some graphs on the great deviation on both sides of the Atlantic
31 Oct 2014 Leave a comment
in economic growth, Euro crisis, fiscal policy, global financial crisis (GFC), great depression, macroeconomics Tags: Eurosclerosis, GFC, Great Geviation, great recession
Figure 1: Actual and potential GDP in the US
Sources: Congressional Budget Office, Bureau of Economic Analysis
Figure 2: Actual and potential GDP in the Eurozone
Sources: IMF World Economic Outlook Databases, Bloomberg
HT: Larry Summers
Did the Left profit politically from Euroland crisis
07 Sep 2014 Leave a comment
in currency unions, Euro crisis, global financial crisis (GFC) Tags: EU politics
HT: whaleoil
Milton Friedman on the future of the Euro
23 Jun 2014 Leave a comment
in currency unions, Euro crisis, macroeconomics, Milton Friedman Tags: Euro, optimal currency areas
I think the euro is in its honeymoon phase. I hope it succeeds, but I have very low expectations for it.
I think that differences are going to accumulate among the various countries and that non-synchronous shocks are going to affect them. Right now, Ireland is a very different state; it needs a very different monetary policy from that of Spain or Italy.
You know, the various countries in the euro are not a natural currency trading group. They are not a currency area. There is very little mobility of people among the countries.
They have extensive controls and regulations and rules, and so they need some kind of an adjustment mechanism to adjust to asynchronous shocks—and the floating exchange rate gave them one. They have no mechanism now.
If we look back at recent history, they’ve tried in the past to have rigid exchange rates, and each time it has broken down. 1992, 1993, you had the crises. Before that, Europe had the snake, and then it broke down into something else.
So the verdict isn’t in on the euro. It’s only a year old. Give it time to develop its troubles (2000)
AND
The drive for the Euro has been motivated by politics not economics.
The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe.
I believe that adoption of the Euro would have the opposite effect.
It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues.
Utopia, you are standing in it! 
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