Here’s a good interview with Chicago’s John Cochrane, who offers incisive contrarian views on money, inflation, “stimulus,” Greece, the euro, economic growth, and Milton Friedman’s “Inflation is always and everywhere a monetary phenomenon” meme. I wrote about these topics here.
Quote of the Day
“A currency union is strongest without fiscal union.”
— John H. Cochrane, May 18, 2010, in a terrific commentary on the Greek crisis and the European Union
The euro at 10
Excellent summary on the euro currency’s first decade of life:
As important, the creation of a single European Central Bank (ECB) has better insulated monetary policy from political manipulation. Politicians could no longer attempt to inflate their way out of their employment or fiscal problems. National central banks could no longer finance fiscal deficits, removing a source of economic instability.
The single economic space anchored by the euro has also forced European policy makers to compete for people, goods and capital with improved policies. While we had hoped to see more reform by now, the pan-European reduction in corporate tax rates is one fiscal benefit of the euro. Even Germany has cut corporate taxes, after its efforts to harmonize rates across the European Union failed.
