The Perils of Zero Inflation for Swedish Household Debt

Zero inflation in Sweden the last two years instead of 2 percent, the inflation target, has substantially increased real household debt. Borrowers have made a real capital loss of 4 percent in two years, and lenders, the banks, have made a corresponding loss. The Riksbank’s “leaning against the wind” policy to reduce household debt is […]

Why Latvia’s Decision to Join the Euro Makes Sense

Last week’s convergence report from the European Commission gave Latvia the green light to become the eighteenth member of the eurozone as of next January. “The eurozone is again a club with a queue–not at the exit but at the entrance,” crowed Herman Van Rompuy, president of the European Council. “Joining the eurozone will foster […]

MMT and Full Employment: Conference in Finland

Sorry for the relative lack of silence–I’m just back from a conference in Finland. Details here: The conference was live-streamed so perhaps some of you watched it. If not, you can see the video here: In particular, my presentation is here:; and James Galbraith’s is here: The panel discussion that followed the […]

State Costs of the 2008 Icelandic Financial Collapse

Outside Iceland it is widely believed that the collapse of the Icelandic financial sector in October 2008 came at no expense to Icelandic taxpayers. This contrasts with taxpayers in Ireland, the UK, Greece, Spain and Portugal, who have recapitalized their banking sectors. However, based on a recent estimate of public funds put into the financial […]

The Finnish Erosion: Dilemmas of the Last Triple-A Eurozone Economies

During the past two years, the Eurozone focus has been on the ailing Southern European economies and their austerity fatigue. In the next two years, it will be on the last triple-A economies in Northern Europe and their bailout fatigue. One of these is Finland – a legendary Nordic tiger whose competitiveness is eroding. Before […]

Lessons from Sweden in Assembling a Recovery

Think today about two countries, both in Europe but not in the euro. They should, in theory, be facing very similar circumstances. But one country, having performed strongly since the worst of the global financial crisis, surprised the markets a few days ago with a 1.4% jump in gross domestic product in the second quarter. […]

Why Finland Is Not Likely to Be the Next

After the recent Eurozone summit, Finnish politics led some observers to think that Finland might be the next to exit the Eurozone. In reality, most Finns would prefer full EZ integration. Small countries like big muscle. After the recent EZ Summit, Finnish PM Jyrki Katainen (conservative) came under fire from opposition MPs claiming that he […]

Neither Grexit, Nor Spexit, It’s Fixit or Fexit

The aftermath to last weeks EU summit has certainly proved to be a damn sight more perplexing than the actual summit itself. Contrary to earlier experiences, this time round the more the details have been “clarified” the more confused we have become. Just what exactly was approved? Will Spain’s banks really obtain capital directly from the ESM, and […]

Fix it or Fixit – Could Finland Be Next?

Talk of Finland leaving the EZ sooner rather than later has increased, with many in influential positions now reconsidering the costs and benefits of EZ membership and coming to the conclusion that a “Fixit” may be the country’s best option. Consider the following factors. First, the other Nordic countries are outside the EZ and/or the […]

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