Theory of Constraints and Economic Growth

More and more it seems to me the economy operates under a group of economic constraints, and performs to the level of the “worst” of these constraints. Credit, housing volume, business investment, commercial real estate, Collateral worthiness, consumer demand, business confidence, foreign demand, relative energy prices – the list of possible constraints on current economicRead More

The Unpleasant Fiscal Arithmetic of Eurozone QE with Risk of Sovereign Defaults

Paul De Grauwe has written about potential fiscal effects from an anticipated ECB quantitative easing (QE) program: http://voxeu.org/article/quantitative-easing-eurozone-its-possible-without-fiscal-transfers The analysis is excellent to a point, but doesn’t go far enough. In fact, there are problems with the methodology and the conclusion. The subject involves complex aspects of Eurozone monetary policy – multiple sovereigns, the prospectRead More