ALL BLOG POSTS
Even though I am a Danish economist I am certainly no expert on the Danish economy and I have certainly not spend much time blogging about the Danish economy and I have no plans to change that in the future. However, for some reason I today came to think about what would have been the impact on the Danish economy if the Danish krone had been pegged to the price of bacon rather than to gold at the onset of the Great Depression in 1929. Lets call it the Bacon Standard - or a the PIG PEG (thanks to Mikael Bonde Nielsen for that suggestion).
Back from my trip to Riga and Stockholm and two books had arrived in the mail from Amazon.
I am sitting in Riga airport and writing this. I have an early (too early!) flight to Stockholm. I must admit it makes it slightly more fun to sit in an airport when you can do a bit of blogging.
David Glasner is a very nice and friendly person, but I have to admit that David always scares me a bit - especially when I disagree with him. For some reason when David is saying something I am inclined to agree with him even if I think he is wrong. There are two areas where David and I see things differently. One the “hot potato” theory of money and two our view of Milton Friedman. I tend to think that the way Nick Rowe - inspired by Leland Yeager - describes the monetary disequilibrium theory make a lot of sense. David disagrees with Nick. Similiarly I have an (irrational?) love of Milton Friedman so I tend to think he is right about everything. David on the other hand is much more skeptical about Friedman.
Nominal GDP targeting makes a lot of sense for large currency areas like the US or the euro zone and it make sense that the central bank can implement a NGDP target through open market operations or as with the use of NGDP futures. However, operationally it might be much harder to implement a NGDP target in small open economies and particularly in Emerging Markets countries where there might be much more uncertainty regarding the measurement of NGDP and it will be hard to introduce NGDP futures in relatively underdeveloped and illiquid financial markets in Emerging Markets countries.
Who is the best central banker - one who is very busy with his job or one who is spending most of his/her time on the golf field?
The short answer to the question in the headline is no, but I can understand if somebody would suspect so. I will discuss this below.
A couple of months ago a friend my sent me an article from the Guardian about how "Nazi Germany flooded Europe with fake British banknotes in an attempt to destroy confidence in the currency. The forgeries were so good that even German spymasters paid their agents in Britain with fake notes..The fake notes were first circulated in neutral Portugal and Spain with the double objective of raising money for the Nazi cause and creating a lack of confidence in the British currency."
Lee Kelly in a recent guest post here on The Market Monetarist discussed the implication of excess demand for money for the development of barter and Free Banking. I found Lee's discussion extremely interesting and think that it could be interesting to see how monetary disequilibrium actually could work as a catalyst for the development of alternative monetary systems - for example the development of so-called local currencies in Greece.