Myths and facts of the Euro crisis part 4 – how to save the Euro – an analysis by João Madeira

As shown in the previous text the run on bank deposits and sovereign debt of periphery countries justified the need for an intervention to change the negative expectations in debt markets and to help interest rates converge to the good equilibrium (governments pay lower interest rates and repay their debts). The creation of the EFSF […]

Myths and facts of the Euro crisis part 3 – capital flight and financial instability in the Eurozone – an analysis by João Madeira

My previous texts seem to suggest that the Euro is likely not the main cause for the problems several European countries currently face. If not the Euro, then what is the origin? The cause must be common not just to the periphery countries of the Euro but also to those other countries which have been […]

Understanding Sovereign Debt: Economics Meets Politics – Dr Giancarlo Ianulardo

1) The Problem of Sovereign Debt Just as economic agents such as individuals, households and firms may take out a loan, sovereign states need to borrow when they run deficits. When the revenues are not sufficient to cover spending, the only solution is to borrow and make a promise to repay the debt in the […]

The economics (and mysteries) of poverty and hunger

Apologies for my absence of late: things have been rather busy. Still busy, in fact, which explains why I’m just going o post a link to another blog, rather than writing one myself. More Than 1 Billion People Are Hungry in the World There’s another reason for linking rather than writing: quality. The link takes […]

The banking mess

Three-and-a-half years have passed since the banking run on Northern Rock in the UK, two-and-a-half since the collapse of Lehman Brothers in the US. And we’re still waiting for the government’s decision about what to do with the banks. There’s been some tinkering. The Financial Services Authority, which bore more than its fair share of […]