Prospects for the European Economy

We can conduct a similar analysis of the European economy as we did for the US economy. We will restrict our discussion to the Euro Area, the countries which share a common currency, the euro. The euro creates a unique, separate trading bloc, the internal dynamics of which need to be understood both to assess the … Continue reading “Prospects for the European Economy”

Pettis on Brexit

Michael Pettis is one contemporary economist whose blog is worth reading. His books The Volatility Machine and The Great Rebalancing are required reading for those who would understand the workings of international trade relations, currency movements, and financial markets. His comments regarding the recent “Brexit” vote by the UK’s electorate are worth delving into. “Last Friday’s … Continue reading “Pettis on Brexit”

The Economic Consequences of the Release (i.e., Brexit)

Much has been written on the recent decision by the UK to leave the European Union. Much of it is emotion-driven. But that is no way to assess such an important turn of events. The actual significance is, in significant degree, economic in nature. This calls for an economic analysis, to which we now turn. … Continue reading “The Economic Consequences of the Release (i.e., Brexit)”

Is There a PIIG in Germany’s Parlor?

“It is a truth universally acknowledged that a single country in possession of a current account surplus must be in need of an export market.” With apologies to Jane Austen, of course: the sentiment thus expressed actually is anything but universally acknowledged. In fact, it flies in the face of received wisdom. We are accustomed … Continue reading “Is There a PIIG in Germany’s Parlor?”