Essays

The Accidental Empire

  • Project Syndicate
  • June 7, 2012
It is now clear that the main cause of the euro crisis is the member states’ surrender of their right to print money to the European Central Bank. They did not understand just what that surrender entailed – and neither did the European authorities.

Remarks delivered at the Festival of Economics

  • Trento, Italy
  • June 2, 2012
Ever since the Crash of 2008 there has been a widespread recognition, both among economists and the general public, that economic theory has failed. But there is no consensus on the causes and the extent of that failure.

Remarks delivered at the INET Annual Plenary Conference

  • Berlin, Germany
  • April 12, 2012
Ever since the Crash of 2008 there has been a widespread recognition, both among economists and the general public, that economic theory has failed. But there is no consensus, even among participants in this conference, on the extent of that failure.

Europe’s Future is Not Up to the Bundesbank

  • Financial Times
  • April 12, 2012
Far from abating, the euro crisis has recently taken a turn for the worse. The European Central Bank relieved an incipient credit crunch through its longer-term refinancing operations. The resulting rally in financial markets hid an underlying deterioration; but that is unlikely to last much longer.

Reversing Europe’s Renationalization

  • Project Syndicate
  • April 11, 2012
Far from abating, the euro crisis has taken a turn for the worse in recent months. The European Central Bank managed to relieve an incipient credit crunch through its long-term refinancing operation (LTRO), which lent over a trillion euros to eurozone banks at one percent.

Angela Merkel is Leading Europe in the Wrong Direction

  • Der Spiegel
  • February 13, 2012
SPIEGEL:  German Chancellor Angela Merkel is praised globally as “Mrs. Europe” and popular at home – partly thanks to her strong refusal to pledge more German money to the Euro rescue effort. You, however, are highly critical of Merkel’s leadership. Why?

New Year, Same Crisis

  • Project Syndicate
  • January 25, 2012
The measures introduced by the European Central Bank last December, especially the Long Term Refinancing Operation (LTRO), have relieved the liquidity problems of European banks, but have not cured the financing disadvantage of the highly indebted member states. Since high-risk premiums on government bonds endanger the capital adequacy of banks, half a solution is not enough.

Remarks delivered at the World Economic Forum

  • Davos, Switzerland
  • January 25, 2012
I have just published a book which tries to explain and, to the extent possible, predict the outcome of the euro crisis. It follows the same pattern as my other books: it contains an updated version of my conceptual approach, the application of that approach to a particular situation and some kind of real time experiment to test the validity of my argument.

How to Save the Euro

  • The New York Review of Books
  • January 24, 2012
My new book, Financial Turmoil in Europe and the United States, tries to explain and, to the extent possible, predict the outcome of the euro crisis. It follows the same pattern as my other books: it contains an updated version of my conceptual approach and the application of that approach to a particular situation, and it presents a real-time experiment to test the validity of my interpretation.

Europe’s Year of Indecision

  • Project Syndicate
  • January 12, 2012
The dire economic situation in which most of the rich world found itself in 2011 was not merely the result of impersonal economic forces, but was largely created by the policies pursued, or not pursued, by world leaders. Indeed, the remarkable unanimity that prevailed in the first phase of the financial crisis that began in 2008, and which culminated in the $1 trillion rescue package put together for the London G-20 meeting in April 2009, dissipated long ago.