Hume on hold?

Michael Burda 17 May 2012

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The great Scottish philosopher and economist David Hume understood all too well how national boundaries and balance-of-payment statistics affect and even determine flows of international trade. Where national boundaries exist, customs offices and government bureaucracies assiduously monitor the flow of goods and assets between countries. Surpluses and deficits are seen by politicians as a sign of national pride or shame. Hume criticised the mercantilist view but was optimistic that trading patterns would ultimately right themselves. In 1752 he wrote:

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Topics:  EU institutions International finance

Tags:  Central Banks, balance of payments, David Hume

The Eurozone crisis: Fiscal fragility, external imbalances, or both?

Pietro Alessandrini, Andrew Hughes Hallett, Andrea F Presbitero, Michele Fratianni 16 May 2012

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The speculative attack against Eurozone sovereign debt, reflected in the extraordinary rise in the yields of government bonds for Greece, Ireland, Italy, Portugal, and Spain (known affectionately as the GIIPS) since the start of 2010, has sparked a heated policy debate on how best to stabilise the Eurozone (see the Vox debate moderated by Corsetti 2012). Two main views have emerged:

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Topics:  EU policies

Tags:  Fiscal crisis, Eurozone crisis, balance of payments

Sudden stops in the Eurozone

Jean Pisani-Ferry, Silvia Merler 02 April 2012

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Many analysts and observers have put forward that the euro crisis is a balance-of-payments crisis at least as much as a fiscal crisis (e.g. Carney 2012, Giavazzi and Spaventa 2011, Sinn 2012, Wolf 2011). The issue has gained further relevance with the widening of imbalances among EZ central banks within the Target2 settlement system and has important implications for both the short- and the long-term policy responses (Bornhorst and Mody 2012).

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Topics:  EU policies

Tags:  capital flows, current account, sudden stops, balance of payments