@mcopelov's Threads
Not a great day for the euro. JCJ whitewashes the Greek crisis, while Weidmann belatedly & lukewarmly accepts OMT. Weak, retroactive “all’s well that ends well” views that pretend all went well, pretend all has ended well & suggests EU responses next time will be equally lacking
A reminder of what fighting to keep Greece in the euro looked like: refusing to play the role of lender of last resort at the moment of need ftalphaville.ft.com/2015/07/02/213…
A reminder of what fighting to keep Greece in the euro looked like: the President of the European Commission and the Chairman of the Eurogroup openly discussing Grexit as a feasible & even desirable option, despite "permanent & irrevocable" monetary union: washingtonpost.com/news/monkey-ca…
As absolutely everyone but Trump and Lighthizer could have predicted, procyclical fiscal stimulus + higher interest rates + dollar appreciation increased the capital account surplus and imports. Macroeconomic factors and dollar reserve currency status once again “Trump” tariffs.
As always, it's important to begin by recognizing that the current account deficit is the mirror image of the capital account surplus. You can't have one w/o the other. If you do things to increase the capital account surplus, the current account deficit will also increase. 
Things like raising interest rates seven times since 2017, which among other things helped lead increased capital inflows & substantial appreciation of the dollar, which in turn made imports cheaper in the US and exports more expensive abroad, exacerbating the trade deficit.
In 2019, it is beyond puzzling why anyone is still trying to defend the position that the stimulus was large enough. That it did not last long enough is also true. Both are critically important to understand 1/
bloomberg.com/opinion/articl…
bloomberg.com/opinion/articl…
It's also important to understand why this happened. Certainly, GOP opposition & political constraints facing the Obama administration. But there were a lot of own goals and guilty parties. The media played a huge role. We knew stimulus worked in 2009 but obsessed about debt 2/
Media, politicians, and academics also fixated on the 90% debt threshold and treated "expansionary austerity" as a serious argument 3/
Today is the #Euro's 20th birthday. It's been a turbulent second decade for the single currency. While the Euro has survived, and in many ways been successful, the fundamental political and economic problems laid bare by the Euro crisis remain 1/ #EUROat20
In 2011, I discussed the economic and political reasons for European monetary integration, as well as the political economy of the crisis. The core problems and barriers to real policy solutions I discussed then largely remain today 2/ video.wpt.org/video/universi…
In 2015, I wrote about the Euro crisis in the wake of the Greek referendum. While the Euro has survived and Grexit, thus far, has not happened, the existential threats to EMU in the long term remain 3/ washingtonpost.com/news/monkey-ca…
Must-read article on the epically disastrous real-world consequences of Britain's failed pursuit of austerity. And yet...there is almost no attempt to connect this to the macro-level failure, and a total inability or unwillingness to draw conclusions 1/ nytimes.com/2018/05/28/wor…
Perhaps one could say "it was worth it" in order to generate aggregate economic recovery. But no, austerity has been a complete and total macroeconomic failure, resulting in a lost decade. Why is this not really discussed? 2/
Perhaps austerity was "necessary"? This is the story still peddled by Daniel Finkelstein ("It was driven by the fact that we had a vast deficit problem") & George Osborne ("“The truth is that the country was living beyond its means") in the article 3/
