Was monetary policy too tight after the crisis?

By: Patrick Minford, Cardiff University and CEPR

Yes, at least in Europe.

The depression of 2009

Wrong government policies on both sides of the Atlantic are turning a crisis into a catastrophe.

Is the euro challenging the dollar's role as a global currency?

When the Euro was launched in 1999, there was much speculation among academics and policy makers about whether the euro could challenge, over even overtake, the dollar as an international currency. Toward the end 2006, the euro has indeed become a big international currency, but has so far failed to challenge the dollar’s predominance in the main categories that define it as the world’s premier currency.

Sarkozy's coup d'etat

Events are moving in Sarkozy's favour. New banking bailouts, and a euro area wide stimulus package will have to be negotiated at euro area level.

Why a stimulus package must be part of any effective rescue plan

This crisis is not over by a long shot. Numerous feed-back loops between the financial system and the real economy will ensure that this crisis will continue for quite some time. In particular, these feedback loops also suggest that the optimal policy response consists of simultaneous financial and economic stabilisation.

No, this is not going to work

I respectfully disagree with the financial markets. These plans, in the way they have been drafted, raise serious issues for long term financial and monetary stability.

The case for a European rescue plan

The case for an EU wide rescue plan is overwhelming: to prevent dangerous spillovers, to ensure adequate funding, and to prevent a collapse of EMU.