samedi 31 décembre 2016

A Critical Issue Adressed to Joseph Stiglitz

A Critical Issue Adressed to Joseph Stiglitz

In "The Euro: How a Common Currency Threatens the Future of Europe", Joe emphasizes the reasons why the Monetary Union Zone has a mediocre macroeconomic results, analyzes the policies implemented by the Troika and proposes some solutions for a better Europe.

One of the sources of pain of Europe, the author points out the ideology behind the construction of the euro zone. Mainly the neoliberalism ideas which characterized the spirit of the most powerful institution: the ECB.

While hi criticizes the neoliberlism in lot of parts of his book, the author proposes as a solution - to limit the current account deficit for a country that will quit the euro zone - : the use of imports/exports certificates. His argument consists of creating a market of those certificates, and the trade in a free market for those certificates will equal the supply and demand. As a result, the cc deficit will be absorbed.

My takeaway:  this solution proposed is inconsistent with the author's mind that markets delivered to themselves do not produce optimal results. Unless, Stiglitz points to another concept of free market.

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