Despite the knotty issues raised by the court’s recent ruling on the European Central Bank's program to purchase member states' public-sector bonds, there could be a silver lining. It is now more likely that the European Union will be forced to confront the main institutional weakness of its monetary union head-on....It will be interesting to see where this goes.
Project syndicate
Did Germany’s Constitutional Court Inadvertently Strengthen the Eurozone?
Hans-Helmut Kotz | former member of the executive board of Deutsche Bundesbank, is Program Director of the SAFE Policy Center at Goethe University in Frankfurt and a resident fellow at the Center for European Studies at Harvard University
2 comments:
My money is on the EURO zone just collapsing.
And there is this "only a minority of economists view central banks as the main determiners of real, inflation-corrected interest rates."
Well MMTers recognized that the nominal rate is ENTIRELY a choice of the Central Bank, and a result, the main determiner of real interest rates as well. At least that is my understanding.
Time for considering John Smithin's work (not that MMTers are unfamiliar with it):
https://www.elgaronline.com/view/journals/ejeep/aop/ejeep.2020.0058.xml
“ Well MMTers recognized that the nominal rate is ENTIRELY a choice of the Central Bank, and a result, the main determiner of real interest rates as well”
I would say not... the MMT people go for the whole mainstream “inflation” schtick 100%... govt sets the “nominal” rate... “real” rate determined otherwise....
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