"The problem with socialism is you eventually run out of other people's money" - Margaret Thatcher
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design" - F.A. Hayek
Armie: I don't know my German history like I should, but around the world they have tried different things. Argentina years and years ago swapped out "old pesos" for "new pesos" at the rate of 10,000 to 1 if I remember correctly. They also tried a currency board around 2000-01 that blew apart in just a short period of time. Dollarization/Euroization or insisting on gold for payment is what they do now in Zimbabwe. Remember Panama has been dollarized for over a century and has never had problems with inflation like all the rest of Latin America. The only alternative Zimbabwe faces if they wish to have their own domestic currency is to start over with someone new with a credible central bank that will insure the store of value function of money against all enemies foreign and domestic so that their currency will remain acceptable as a means of payment. Or in other words, they are screwed.
I am a Professor of Economics at East Carolina University in Greenville, NC.
My research focuses on macroeconomics and economic history in general and the economics of the Great Depression in particular. I have authored two books, Reflections on the Great Depression and The Economics of the Great Depression: A Twenty-First Century Look Back at the Economics of the Interwar Era and edited The Seminal Works of the Great Depression. I am currently working on my fourth book Interwar Historical Antecedents of Modern Inflation Targeting and I am the co-editor (with Robert Whaples) of The Handbook of Major Events in Economic History and The Handbook of Modern Economic History.
I have also traveled the country giving speeches on the state of the macroeconomy and other economic issues to many trade and business associations. When I am not thinking about the economy I am either chasing ducks, handicapping horses or arranging a fine dining experience.
Lastly, the opinions expressed on this blog are mine alone and do not reflect upon East Carolina University in any way or manner, in whole or in part, now and forever more under the canopy of heaven.
3 comments:
So Doc, what is the remedy for an economy in such a situation?
What was the course of action in the Weimar Republic?
The short answer is REGIME CHANGE! More later...
Armie: I don't know my German history like I should, but around the world they have tried different things. Argentina years and years ago swapped out "old pesos" for "new pesos" at the rate of 10,000 to 1 if I remember correctly. They also tried a currency board around 2000-01 that blew apart in just a short period of time. Dollarization/Euroization or insisting on gold for payment is what they do now in Zimbabwe. Remember Panama has been dollarized for over a century and has never had problems with inflation like all the rest of Latin America. The only alternative Zimbabwe faces if they wish to have their own domestic currency is to start over with someone new with a credible central bank that will insure the store of value function of money against all enemies foreign and domestic so that their currency will remain acceptable as a means of payment. Or in other words, they are screwed.
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