sovereignty

Last summer I wrote a post clarifying some points that I have learned about Modern Monetary Theory. The genesis of the post was a gross mischaracterization of Modern Money Theory (MMT) by Paul Krugman in a piece called “I Would Do Anything…

The Europeans can’t catch a break. The crisis has already flared before they have had a legitimate opportunity to deal with the medium- and longer-term issues. Willem Buiter says the Europeans need a 2.5 trillion euro EFSF to deal with…

The normal case—let us say, in the US or the UK or Japan—is that anything for sale is for sale in the domestic currency. These sovereign governments never find that they cannot buy something by issuing their own currency. However, the…

When the government issues a currency used as the money of account and accepts that currency in tax payment, it is not necessary to “back” the currency with precious metal or enforce legal tender laws. Taxes drive money.

This post is a prelude to a BBC interview on the sovereign debt crisis. I am not going to answer financial Armageddon questions about "what oif it all goes pear-shaped" here because to understand where things are headed you need to know how…

Guilio Tremonti, the Italian Finance Minister, last week compared Germany and its small-minded Chancellor Angela Merkel to a first-class passenger on the Titanic. To repeat: this is not a problem confined to the periphery. The sovereign…

At the weekend, I saw three articles asking essentially the same question about sovereign debt crisis contagion: why Italy and why not Japan (the US or Germany)? Here's my answer.

The ECB does have the power to end this. They are not doing so for ideological reasons. Let me suggest two scenarios.

This post explains both the wellspring and the significance of currency sovereignty, something that Eurozone countries gave up to join the single currency.

Apparently, market professionals are willing to accept short-term government paper at auction with no discount through four weeks.