Debt restructuring in the euro area: A necessary but manageable evil?
Darvas, Zsolt. There are two possible responses to the Greek debt crisis: ‘Plan A’, continued official lending, for as long as needed, with possible voluntary private sector involvement, and ‘Plan B’, coercive pre-emptive or post-default restructuring with significant face value reduction. Both options have risks, but it is necessary to move to Plan B sooner or […]
Mr Keynes and the moderns
Krugman, Paul. Keynes’ General Theory is 75 years old. In this column, Paul Krugman argues that many of its insights and lessons are still relevant today, but many have been forgotten. A broad swath of macroeconomists and policymakers are applying old fallacies to today’s crisis. As the nostrums being applied by the “pain caucus” are […]
Delaying Tactics No Help in Greek Tragedy
Hannon, Paul. Not for the first time during the slow-motion car crash that is the euro zone’s fiscal crisis, policy makers are tying themselves in knots in an effort to minimize collateral damage. They fret over whether ratings agencies and other self-appointed market regulators will define investors’ participation in a new Greek funding package as […]