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As the Euro zone crisis continues to escalate and European policy makers are trying to avoid that the Greek sovereign debt crisis develops into a European wide banking crisis it might be an idea to study history. The Great Depression gives us many insides to what to do and what not to do to avoid crisis.
Here is a quote from a random article from the financial media in 2008:
I have often been critical about Alan Greenspan's economic thinking, but listen to this Interview on CNBC. It is pretty good. Greenspan talks about the international financial linkages - particularly between the US and the euro zone. He makes a lot of sense (other than some odd cultural references, which the rather uneducated reporters just go along with...)
When I wrote my book on Milton Friedman (sorry it is in Danish…) a decade ago I remember that the hardest chapter to write was the chapter on Friedman’s methodological views. It ended up being a tinny little chapter and I was never satisfied with it. The main reason was that even though I was and continue to be a Friedmanite in my general (macro) economic thinking I did not agree with Friedman methodological views.
Ok, I was wrong. I kind of expected that Scott Sumner would not get the Nobel Prize in economics (yeah, yeah I know that its not a real Nobel Prize…) and no I can hardly say that Thomas Sargent and Christopher Sims are not world class economists. Both certainly are, but I must say I am a bit disappointed by the increasing focus among economists on econometrics. But there is no reason to blame Sargent and Sims for that.
McCallum - a inspiration for Market Monetarists
The IS/LM model is standard macro textbook stuff. Unfortunately the model is highly problematic and even worse it seems like the IS/LM model (in its most simple form) is the only model that certain policy makers understand. Recently a debate about the IS/LM model has been flaring up.