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But the diary could have been ignored. It is interesting that so much effort has gone into defending lumping together similar numbers of EU countries and non-EU countries when the common constraint on all EU countries of having to act as though they are on a gold standard is having such dramatic effects on them. Perhaps this is unremarkable to 'mainstream' economists, but to me it seems it would be better to 'compare and contrast' EU countries to countries with their own sovereign currency AND a central bank committed to protecting the solvency of its banks, (full stop).

It also raises the question of whether the authors consider such defense appropriate, even if it should entail 3-5%/yr inflation for smaller countries - or even if it entails no inflation - as is currently the case with the Fed policy in the USA.  

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 15th, 2013 at 02:18:17 PM EST
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