Is the Fed monetarist?

By: Patrick Minford, Cardiff Business School

The US central bank reacts flexibly to the ups and downs of the economy, as would happen under a money supply target

The cause of tax evasion are taxes

By: Wolfgang Münchau

Germany's jihad against tax evaders is a macroeconomic non-event.

Stop the press: A European central banker has been caught telling the truth

Question: How can you tell that a central banker is telling the truth? Answer: When he issues a denial. The Greek central bank governor Nicholas Garganas made a perfectly sensible remark about how a strong euro could make further interest rate increases unnecessary. We agree with his sentiment. Then he retracted his statement, and now we agree with his original statement even more.

With the Euro at $1.35 and Y160, who needs higher interest rates?

European interest rates will go up to 4% in June, but the continued rise in the euro's exchange rate will put a lid on further interest rate increase. The current rate will peak at 4% in our view, contrary to market expectations.

Some thoughts on decoupling from a European perspective

In its latest World Economic Outlook, the IMF has had an interesting article on whether the world can decouple from the US. What about the euro area? Trade is not an important factor, but this is more than compensated through the close financial market links. If there is financial stress in the US, there is no chance that Europe will decouple.

How dangerous is Nicolas Sarkozy?

If a politician on a campaign trail says a thing once, you can safely dismiss it. If he repeats it once or twice, you may still choose to ignore it. But if he says it twenty times, you should listen up. Nicolas Sarkozy’s bashing of the European Central Bank is not only extreme and stupid, it s also persistent, and this is why we should take it seriously.

Euro interest rates to go up to 4.5% this year? You must be kidding.

In the last few days several banks have upped their interest rate forecasts. They now say that European policy rates may hit 4.5% as early as this autumn. While this is not yet the consensus, there appears to be a general trend among ECB watchers to revise their forecasts upwards. We think this is wrong.