The ECB met earlier today to conduct the monthly review of interest rate policy. It came as a surprise to noone that the outcome was to leave everything just as it is. Surprisingly though the decision this month is surrounded by a little more controversy than has been the case of late since Italy’s Berlusconi and economic opinion in Germany have been suggesting that some reduction of rates might be no bad thing, whilst Spain’s economy minister (and former EU commisioner) Pedro Solbes is reported to have been pushing for an increase. Why the difference?
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Tag Archives: monetary
The World As Optimum Currency Area?
I was a little surprised to read in the Christmas edition of the Frankfurter Allgemeine Sonntagszeitung (not yet online, subscription wall, in German) that Robert Mundell seems to have changed his mind. In his seminal 1961 paper about monetary integration, he famously stated that “the optimum currency area is not the world”. Now it appears he favors a sort-of worldwide currency union, initially comprising Dollar, Euro, and Yen (apparently, he’s also made that point earlier this year in Lib?ration (subscription wall, in French)).
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I Don’t Understand Modern Conservatism
The recent biography of Mrs Thatcher by John Campbell (in particular volume one, The Grocer’s Daughter) did a good job of setting out just how much Hayek’s writings shaped Thatcher’s political outlook from her student days in Oxford onwards, in particular by paying close attention to her political speeches around 1950, when she was running for Parliament in Deptford, some of the few occasions in her early political career when she was making speeches without being bound by front bench discipline.
That part of the Right of the Conservative Party which is most keen to claim its legitimate political descent from Mrs Thatcher is most adamantly opposed to the European Union in general and British participation in the single European currency in particular.
I sometimes think that this should puzzle us more than it does…
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Fiscal Tickery
Thanks David for the link. I haven’t commented on this because like Dutch finance minister Zalm (who I imagine working away weblogging into the early hours under a dim light provided only by his mobile phone) I am tired. I can’t help feeling that everything that needs to be said has already been said, and many times over. Now all we can reasonably do is wait and see the consequences.
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