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Tag Archives: seigniorage
Are ECB’s Greek bond purchases really irrelevant for the private sector?
Motivated by the current discussions about the Greek debt problems, Paul De Grauwe and Yuemei Ji have a VoxEu column addressing “Why the ECB should not insist on repayment of its Greek bonds”. In a debate that currently is, and has been for a long while, marred by political idiosyncrasies and ethnic stereotypes of the worst kind, it is a sound and healthy contribution based on basic public accounting. In all fairness, however, the authors cannot help contributing to the nationalistic platitude by making snide remarks about “hard-working German tax payers”. Also, in an earlier VoxEu column on the same subject they almost question the intellectual sanity of German economics … Continue reading
Posted in Monetary policy
Tagged debt crisis, European Central Bank, Greece, Paul De Grauwe, Securities Markets Programme, seigniorage, Yuemei Ji
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Can the US Go Bankrupt? Yes, of course it can
A few days ago, the rating agency Standard & Poor’s changed its rating of US government bonds from the usual (highest possible) AAA to a similar one, but with a “negative outlook warning”. This caused havoc around the blogosphere and in policy circles. Some claimed that this was an untimely private, and politically motivated, action serving to undermine public spending programmes in the US. In any case, the market didn’t take much notice, as the interest on government bonds moved little. “Poor Standards” as Paul Krugman called it. He may be right. After all, S&P did funny ratings in the past (remember house-backed securities pre 2007?). And, by the way, … Continue reading
