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Your reply, and the blog post linked, do nothing to enhance your scientific credibility.

My take-away from the blog post is this : you claim that showing a correlation between EU countries' debt levels and bond interest rates has policy implications for the USA.

This is a political assertion, and frankly laughable from an economics point of view. The graph from your blog (below) demonstrates that, as long as the market was under the illusion that the Euro was a normal currency, debt levels had no influence on interest rates for member countries. It was precisely when it became apparent that the ECB was unwilling to function as a true central bank, and was in fact prepared to let member countries' economies go to the wall, that the correlation between debt levels and interest rates becomes apparent.



It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Mar 14th, 2013 at 11:47:29 AM EST
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