tag:blogger.com,1999:blog-5882645467378797266.post8765411000675717196..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: Different Currencies for Different Cultures?kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5882645467378797266.post-1259619332512723182013-08-11T17:28:26.257+02:002013-08-11T17:28:26.257+02:00This is also a good paper:
http://pubs.aeaweb.org...This is also a good paper:<br /><br />http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.3.167kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-49569324457598282322013-08-11T17:00:16.812+02:002013-08-11T17:00:16.812+02:00This excellent paper paints a different picture.
...This excellent paper paints a different picture.<br /><br />http://www.pressproject.gr/external.php?id=43458<br /><br />Germany was the country that didn't stick to the common inflation target (2%).<br /><br />It is also pretty enlightening about the ECB's and the European Commission's obsessive emphasis with the stocks, as opposed to their indifference with the (much more important) flows.Jim Sliphttps://www.blogger.com/profile/15325962115410722474noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-42472918617512923442013-08-11T12:43:11.590+02:002013-08-11T12:43:11.590+02:00Different currencies with floating exchange rates ...Different currencies with floating exchange rates alignes capital and goods flows with productivity.<br /> The biggest problem of the Euro has been difference in productivity. This is a cultural differnce that could be explained by the climate. Warm climate does not foster factories but did foster the product of ancient Greek philosophy. <br /> Dineronoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-68450057628941522352013-08-11T10:04:15.479+02:002013-08-11T10:04:15.479+02:00Culture and mentality provoke preferences of popul...Culture and mentality provoke preferences of populations and set limits to what is politically possible. There are also differences in economic know-how and experience in various populations. This results in the differences stated by Dahrendorf. <br /><br />When Mr. Prodi was president I thought that Italy might modernize it's economy to northern standards. Today’s dire status makes it obvious that it will not happen in foreseeable future. Thorough observation of what happened in Greece leads to the conclusion that it can and should not participate in the Euro either.<br /><br />When Greece has left the Euro, the blame game will stop, the population will painfully learn that economic realities have become much harder in all countries. Unless they do reform the political _and_ economic system their income will diminish even more.<br /><br />H. Trickler<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-7897571320486539682013-08-10T20:33:43.173+02:002013-08-10T20:33:43.173+02:00The currency has NOTHING to do with the people. Al...The currency has NOTHING to do with the people. All people have to work with the same rules regardless of their "culture", ie they cannot spend more than they take in.<br /><br />The only culture that is different is between governments. All governments want to spend more than they take in and they simply rob the people to get their money back through inflation. Some governments rob their citizens more than others. That is the culture difference, some governments have historically robbed the citizens more than others.<br /><br />The Greek government has been a degenerate for as long as people can remember. Capital controls and 20% inflation pre Euro being the proof.<br /><br />So again, the culture you talk about is government culture and not the culture of the people. All people understand they cannot spend more than they take in regardless of where they live. Richardnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-64931350516643516702013-08-10T11:25:09.344+02:002013-08-10T11:25:09.344+02:00Also explains why the other two major currency uni...Also explains why the other two major currency unions (Central/West African Franc & East Caribbean Dollar) have functioned more or less successfully since their inception, the 50's for the CFA Franc and the '80's for the ECD. The countries in each have a lot in common with one another, including history (French & British colonies respectively), economic development status, culture and language. What they don't have a lot of, is cross-border trade.<br /><br /><br />BBC did a short interview with an Oxford Analytica analyst yesterday on the mood of Brazil and other Latin America countries that lead to their abstentions from voting at the recent IMF meeting. I suspect later retractions from Brasilia are smoke screen cover ups. As Caesar is said to have said as he crossed a certain river, <i>Jacta alea esto</i>, although he probably said <i>Ἀνερρίφθω κύβος</i>, rendered in English as <i>let the die be cast</i>.<br /><br />Two numbers that took my attention were - the EU holds 1/3 of the voting rights on the IMF board (I knew that) and 3/4 of the IMF's outstanding loans are owed by EU member states (didn't know it was that high). That would include loans to Latvia, Hungary etc. But still and all its easy to see why countries like Brazil are fed up pouring money into countries like Greece. The GDP (PPP) per capita (2012) for each are <br /><br />Greece - USD24,505<br />Brazil - USD11,875<br /><br />The OA analyst predicted that Latin America could demand trade concessions from the EU if their abstentions are not to become No votes. Same goes for South Africa, India, SE Asia countries like Indonesia, all whom are being courted by the EU for FTAs.<br /><br />If Greece wants Brazilian reals, then its going to have to import more than just toothpaste. Because it has limited heavy industry, Greece has no need to import Brazil's mineral resources in any significant quantity. But Brazil has a thriving pharma sector (as does India), pharma was one of McK's shining stars.<br /><br />Be interesting to see what happens at the G20 summit.<br /><br />The OA analyst thought it would take Greece and other distressed Euro countries at least 10 years to turn their economies around, and probably more like 20 years.<br /><br />The analyst was refreshing in that she offered no opinions on whether the Euro was good or bad, whether it will survive or fail, or who is to blame for its current malaise.<br /><br />CKCanutely Kinghttps://www.blogger.com/profile/07318977471631386327noreply@blogger.com