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Mikio Kumada tells the right story about the Japanese GDP numbers

Earlier today we got numbers for Japanese GDP numbers for Q4 2014. Watch my friend Mikio Kumada comment on the numbers here.

I fully share Mikio’s optimistic reading of the numbers. Bank of Japan’s quantitative easing is working and is lifting nominal spending growth.

Does that solve all Japan’s problems? No certainly not. It cannot do anything about Japan’s structural problems – particularly the negative demographics – but it is pulling Japan out of the deflationary-trap. And that is exactly what BoJ governor Kuroda set out to do. Now Prime Minister Abe has to deliver on structural reform, but that can be said about every industrialized country in the world.

PS Yes, I am positive about the Bank of Japan’s policy actions, but I still think it would have been much better with a NGDP level target for Japan rather than a 2% inflation target.

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“Now the enriched country merely declares it is insolvent and spits on Its victims.”

I can’t help of thinking of events in the 1930s when I see the headlines in the financial media these days. One thing is the geopolitical situation – another thing is the new Greek government’s attempt to negotiate a new debt deal with the EU.

To me it is striking to what extent the economic and political situation in Greece resembles that of Germany in the early 1930s. And similar the position of Germany today – both that of the German media and of the German government is very similar to the French position in the early 1930s.

In 1931 the German economy was in a deep crisis with deflation and ever mounting debt – both public and private. A rigid monetary regime – the gold standard – was strangulating the German economy – while extremist parties on the left and right became increasingly popular among voters. At the same time the position of French government was uncompromising – Germany’s problems is of her own making. The answer was more austerity and there could be no talk of a new debt deal for Germany. Nobody seemed to think there was a monetary solution.

I therefore think we can learn a lot from studying events in the early 1930s if we want to find solutions for the euro zone crisis and it might be particularly suiting for the German newspapers to take a look at what they themselves were writing in early 1930s about the French position and then compare that with what today is written in Greek newspapers about the German position today.

Or compare what the French media was saying about Germany in 1931. Just take a look at this quote:

(The French newspaper) L’Intransigeant describes Germany‘s financial methods as frankly dishonest bankruptcy. “In 1923,” it states, “Germany reduced the national debt to nothing, then borrowed abroad on short terms credit which was invested on long terms, and is thus unable to repay her creditors. Now the enriched country merely declares it is insolvent and spits on Its victims.”

I am pretty sure I could find a similar quote in the Bild Zeitung today about Greece.

I encourage my readers to have a look at the newspaper achieves from 1931 to find similarities with the situation today in regard to the relationship between France and German in 1931 and Germany and Greece today. I will be happy to publish your findings (drop me a mail at lacsen@gmail.com).

Selgin on Haber and Calomiris

There is no doubt that I very much like Stephen Haber and Charles Calomiris’ great book “Fragile by Design” on the constitutional origin of banking crisis (take a look at my earlier posts on the book here and here)

I do, however, not agree with everything in the book and now George Selgin has a review of “Fragile by Design” that addresses some of these issues. It is a great review. The read the read book and read the review.

Here is the abstract from George’s review:

 In Fragile by Design (2014), Charles Calomiris and Stephen Haber argue that banking crises, instead of being traceable to inherent weaknesses of fractional-reserve banking, have their roots in politically-motivated government interference with banking systems that might otherwise be robust. The evidence they offer in defense of their thesis, and their manner of presenting it, are compelling. Yet their otherwise persuasive work is not without significant shortcomings. These shortcomings consist of (1) a misleading account of governments’ necessary and desirable role in banking; (2) a tendency to overlook the adverse historical consequences of government interference with banks’ ability to issue paper currency; (3) an unsuccessful (because overly deterministic) attempt to draw general conclusions concerning the bearing of different political arrangements on banking structure; and (4) an almost complete neglect the of role of ideas, and of economists’ ideas especially, in shaping banking systems, both for good and for evil. The last two shortcomings are especially unfortunate, because they suffuse Fragile by Design with a fatalism that is likely to limit its effectiveness in sponsoring needed change.

PS my recent presentation of monetary and currency reform in Iceland was very much in the spirit of Fragile by Design.

Kuroda’s new team member – Yutaka Harada

If monetary policy is credible and strictly rules based who is running the central bank has little importance. However, if the central bank has not established full credibility then who is running the show will actually be important. Therefore, last week’s news that Yutaka Harada has been nominated for Bank of Japan’s board should certainly be noticed.

I personally have little knowledge of Professor Harada, but I of course have noticed that he has been both described as a “reflationist” and a “monetarist”.

Furthermore, it is notable that he is said to favour fiscal consolidation and structural reforms for Japan. This of course is as Scott Sumner notices the unique market monetarist “policy cocktail” that would be the right one for Japan in the present situation.

Harada’s monetarist insights

As I previously had not even heard of Harada I have done a bit of research on his views. Doing that I came across a paper – “Using Monetary Policy to End Stagnation” – he authored back in 2010. I am not sure Harada would describe himself as a monetarist, but his 2010 paper is certainly quite monetarist. Here is a few quotes…

First on the BOJ’s “restrictive policy”:

Compared with a growth strategy with indeterminate effects, stabilizing the value of the yen would produce quick results. Why has the yen become strong? The reason is a restrictive monetary policy. How can we say that policy has been tightened when interest rates remain so low? To answer this, we need to look at not interest rates but the money supply to see how much money is being fed into the economy.

Japan’s bias toward restrictive monetary control was excessive even in the wake of the global financial crisis…

…The BOJ argues that other countries needed to expand the monetary base in order to absorb the shock to their financial systems from the emergence of vast quantities of bad debts, and that Japan had no such need because domestic banks were not burdened by a heavy load of nonperforming loans. It is true that bad debts did not hobble Japan’s banks. Nonetheless, the global recession dealt a sharp shock to external demand, and the rising yen delivered a follow-up blow.

So we got a Hetzelian/Sumnerian explanation for the weak Japanese recovery after the “Lehman shock” in 2008 – the Japanese recovery in 2009-10 was weak because monetary policy was tight. The markets – the yen – is telling us that and low rates is not a sign a sign that monetary policy is easy.

So the crisis is one of weak demand, but Harada is skeptical that fiscal policy can be used to solve the problem:

Using fiscal policy to generate demand means stepping up government spending, which has to be paid for by either issuing government bonds or hiking taxes. Both of these funding methods involve collecting money from the public. Basically the government just takes money out of citizens’ right pockets and puts it back in their left pockets. Monetary policy works in a different way. A central bank is capable of expanding the money supply without limit. It can, for instance, buy government bonds and supply the market with funds. These are not funds it collects from the public, and so it can put money in citizens’ left pockets without taking anything from their right pockets.”

So Harada welcomes quantitative easing, but it needs to be done within a rule-based framework:

“Of course, adopting such a policy over an extended period of time would invite criticism, since it would trigger inflation and could wind up causing the kind of hyperinflation Zimbabwe has been suffering from. A policy of significantly expanding the money supply must therefore be left in place only for a while, after which the central bank must redirect its aim at a modest inflation rate of, say, 2%. This would be a policy of inflation targeting, and it provides one way of terminating more aggressive monetary relaxation.

Harada goes on to take on the traditional deflationist views of the BoJ (you could easily replace BoJ with ECB):

Although Japan’s prewar elite had some outstanding members, notably Takahashi Korekiyo, these days everyone seems to have swallowed the nonsensical line of the BOJ. Monetary policy, the bank argues, is not involved in the ongoing deflation. It points instead to such factors as inexpensive imports from China and other low-wage countries, price markdowns due to streamlining in distribution and deregulation, a sustained wage decline, and a lowering of growth expectations. Deflation is structural factor, the BOJ says, and no amount of money supply expansion would bring it to a stop.

We need to note, however, that whereas China is exporting low-priced goods around the world, it is only in Japan that prices are falling. Distribution streamlining and deregulation may well cause prices to drop, but they should also be expected to speed up the economy’s growth rate, and that has not occurred. Wages are indeed in the midst of a downward trend, but that is because of the ongoing deflation and business slump, which have been caused by the BOJ’s passive policy stance. Companies are hardly likely to hike wages at a time of falling prices and slim profits. An expectation of slower growth in the future is a certainly a cause of diminished demand, since many people will tighten their purse strings, but that does not automatically make it a deflationary factor. Slower growth would also cause future supply to diminish, and that would be an inflationary factor. Supply and demand factors are both involved in price movements, and we would need to know which is larger before calling lowered expectations a deflationary force.

And finally echoing Milton Friedman Harada explains the relationship between the stance of monetary policy and the level of interest rates:

“Here we should note that interest rates are low today not because the BOJ has adopted a policy of easy money but because it is sticking to a policy that is fostering deflation. If the BOJ had acted in the same way the Bank of Korea did when it expanded the monetary base to deal with the global financial crisis, probably the yen would not have appreciated, exports would not have dropped so far, and employment would not have been cut back so sharply. Japanese production would have recovered in tandem with the recovery of the world economy, and prices would not have fallen. With output expanding, profits would have improved, and both real and nominal GDP would have increased. All this would have set the stage for expectations of an upturn, and short- and long-term interest rates would have risen.”

We will see how Yutaka Harada actually performs on the BoJ’s board, but I think it is fair to say that the BoJ will take a step further in a monetarist direction with the nomination of Yutaka Harada to the BoJ board.

Jens Weidmann should be promoting (some of) Varoufakis’ ideas

The new Greek Finance Minister Yanis Varoufakis is all over the international media these day and surprise, surprise he is making a lot more sense than a lot of people (including myself) had feared.

I have certainly not been optimistic about what the new hardcore leftist Greek government would come up with. However, I most admit that I have some (considerable) sympathy for the fact that Greek public finance problems are not entirely a result of Greek economic-political mismanagement (even though there has been a lot of that).

Hence, the sharp rise in Greek public debt to GDP since 2008 to large extent is a result of the collapse of Greek nominal GDP and I have often been arguing that we do not (primarily) have a debt crisis in the euro zone. We have a nominal GDP crisis and the euro crisis is primarily a result of overly tight monetary policy.

While Varoufakis certainly is not a monetarist he fully well understands that at the core of the Greek crisis is the collapse in NGDP and I was very pleasantly surprised to see his proposal for a new Greek debt deal with the EU.

This is what Financial Times writes about Varoufakis’ new proposals:

Attempting to sound an emollient note, Mr Varoufakis told the Financial Times the government would no longer call for a headline write-off of Greece’s €315bn foreign debt. Rather it would request a “menu of debt swaps” to ease the burden, including two types of new bonds.

The first type, indexed to nominal economic growth, would replace European rescue loans, and the second, which he termed “perpetual bonds”, would replace European Central Bank-owned Greek bonds.

He said his proposal for a debt swap would be a form of “smart debt engineering” that would avoid the need to use a term such as a debt “haircut”, politically unacceptable in Germany and other creditor countries because it sounds to taxpayers like an outright loss.

So Varoufakis is suggesting is to swap the Greek debt to the EU (and ECB) with nominal GDP linked bonds. What can I say? Great idea Yanis!

I have of course for years be arguing that governments should issue debt linked to nominal GDP – not only because NGDP linked bonds would provide a very good measure of the monetary policy stance, but also because it would be good from a public finance perspective (and from a general macroeconomic stability perspective).

I therefore wholeheartedly support Varoufakis’ proposal – as a general principle to debt restructuring. Obviously to make a deal it should be in the common interest of both the EU and Greece and there are certainly very good arguments against just sending another big cheque to Athens. But this is exactly the point – this would (in general) be in the interest of both Greek and German taxpayers.

What we want to see is a situation where Greek government continues to service its debt. But we also want a situation where this doesn’t push Greece to a disorderly default and a disorderly exit, which would jeopardize economic and financial stability in Europe. I believe that a new debt deal that to a larger extent links Greek public debt to the future developments in nominal GDP would make it easier for Greece to service the debt, but also make it less likely that we get a disorderly collapse.

How would it work?

The general idea with NGDP linked bonds is that the servicing of the public debt is linked to the performance of Greek NGDP. This would mean that if growth picked up in Greece then the Greek government would pay of more debt, while is NGDP growth slows then Greece will pay of less debt.

This of course would make Greek public finances much less sensitive to shocks to NGDP and therefore reduce the likelihood that the Greek government would be forced to defaults if growth fails to pick-up. On the other hand German taxpayers should welcome that if there I a pick-up in NGDP growth in Greece then the Greek government would actually pay back its debt faster than under the present debt agreement.

Furthermore, more if public debt servicing is linked to the development in NGDP growth then Greek public finances would become significantly more counter-cyclical rather than pro-cyclical.

Jens Weidmann should be Varoufakis’ best friend

Hence, there are some very clear advantages with NGDP linked bonds. The most important, however, might be that if Greek public debt is linked to NGDP then it would significantly ease the pressure on the ECB to do things that fundamentally has nothing to do with monetary policy.

The ECB’s job odd to be to ensure nominal stability in the euro zone economy. It is not and should not be the job of ECB to bail out governments and banks. Unfortunately again and again over the past six years the ECB has been forced to bailout euro zone countries for example through the so-called OMT programme. Hence, ECB has again and again conducted credit policy (rather than monetary policy) to avoid euro zone countries defaulting.

The ECB is largely to blame for this itself because it has kept monetary conditions far too tight. However, it does not change the fact that the ECB has been under tremendous pressure to bailout nations and banks rather than conduct sound monetary policies.

By linking Greek public debt to NGDP (in Greece) Greek public finances would be more immune to monetary policy failure in the euro zone.

And this is why the hawkish Bundesbank chief Jens Weidmann should be an enthusiastical support for Varoufakis’ debt plan as the “cost” of tight monetary policies in the euro zone would be smaller.

Just imagine that all public debt in the euro zone had been linked one-to-one to euro zone NGDP. The ECB might have failed in 2008 to keep NGDP “on track”, but there would not have been any public finances crisis in the euro zone as public debt to (N)GDP ratios would have remained fairly stable and it would have been very unlikely that Greece would have needed an bailout. In such a situation the pressure to the ECB to support government lending would have been much smaller.

The graph below illustrates the very close correlation between NGDP growth and public debt developments in the euro zone. Greek debt ratio spiked primarily because Greek NGDP growth collapsed.

I have a lot of sympathy for the “German view” that the ECB should not bailout banks and countries, but if the ECB fails to deliver nominal stability it is unavoidable that there will be pressure on the ECB to do things it shouldn’t be doing.

Therefore, Jens Weidmann should not only endorse the general principle that Greek public debt to a larger extent should be linked to NGDP growth, but he should also advocate that public debt across the euro zone should be NGDP linked as it would significantly reduce the pressures the ECB to conduct problematic credit policies, which increases moral hazard problems.

Varoufakis should pay tribute to David Eagle

Yanis Varoufakis probably never heard of David Eagle. In fact most economists never heard of David Eagle. However, I believe that David is the economist in the world who has done the most interesting academic work on what he has termed quasi-real indexing. David’s work centres on both the principle of making debt linked to the development in nominal GDP and on the advantages of NGDP targeting.

David back in 2012 wrote a numbers of very insightful guess posts on this blog about these topics. Everybody interested in the theoretically foundation for Varoufakis’ ideas should read this guest post. Here is an overview:

Guest post: GDP-Linked Bonds (by David Eagle)

Guest blog: NGDP Targeting is NOT just for Central Banks! (David Eagle)

Guest Blog: The Two Fundamental Welfare Principles of Monetary Economics (By David Eagle)

Guest post: Why I Support NGDP Targeting (by David Eagle)

Guest post: Central Banks Should Quit “Kicking Them While They Are Down!” (by David Eagle)

Quasi-Real indexing – indexing for Market Monetarists

David Eagle’s framework and the micro-foundation of Market Monetarism

Dubai, Iceland, Baltics – can David Eagle explain the bubbles?

A simple housing rescue package – QRI Mortgages and NGDP targeting

Supporting NGDP-linked bonds, but not the entire “Syriza package”

I have in this blog post voiced my support for the Greek Finance Minister’s suggests for a debt swap based on NGDP bonds. I should stress that that does certainly not mean that I in any other way supports the Greek government’s economic proposals. In fact I am deeply concerned about some of the ideas, which has been floated by the Greek government. The governing Syriza party is an extreme leftist party, which is strongly opposed to the free markets ideals I hold dearly, but on the issue of the desirability of NGDP linked bonds the Greek government has my full support.

How to choose a ”good” monetary regime

My recent trip to Iceland and my discussions there about the possible future changes to Iceland’s monetary regime have inspired me a great deal in terms of organising some of my views on monetary matters in general.

Market Monetarists are known for our advocacy of nominal GDP level targeting, but it is also well-known that we have argued this primarily for countries like the US or UK rather than as a “one-size-fits” all regime. In fact Scott Sumner again and again has stressed that he does not think NGDP targeting necessarily is fitting for small-open economies like Denmark or Hong Kong.

Similarly I have myself suggested other rules for small-open economies such as my suggestion that commodity exporting countries like Russia should peg the export exchange to the price of its main export. This of course is what I have termed an Export Price Norm (EPN).

Similarly while Milton Friedman generally favoured floating exchange rates he also noted that different variations of pegged exchange rate regimes might be preferable for certain countries. Friedman often highlighted the apparent success of Hong Kong’s currency board system as a good monetary regime.

One can of course see this as pragmatism or realism and I am sure Scott would have no problem with that. However, I would rather stress the crucial different between what we want to achieve with our choice of monetary regime and how we are trying to achieve it.

Towards a “good” monetary regime
In my presentations in Iceland I stressed that I don’t think there is such a thing as an “optimal” monetary policy regime. What is the best regime might change over time and between different countries depending on numerous factors.

Hence, the choice of monetary regime to some extent will have to be a purely empirical matter. We fore example can’t say a priori that floating exchange rates are preferable to pegged exchange rate regimes under all circumstances even though some of us tend to think that variations of floating exchange rates in general are preferable to fixed exchange rate regime.

However, I believe that we a priori can establish certain criterion for what outcome we would like see a certain monetary regime produce.

Overall, I believe that the overriding goal of the monetary regime must be to ensure the highest possible level of nominal stability.

I see nominal stability as a situation where the monetary regime does not generally distort the allocation of goods, labour and capital both across sectors and across different time periods. Hence, my ideal monetary regime is one that we can think of as “neutral” in the sense it does not impact relative prices in the economy.

This basically means that the monetary regime should ensure an outcome similar to a batter economy with no transaction costs – an outcome where Say’s Law rules or an outcome where we cannot make any Pareto improvements by adjusting or changing the monetary regime.

Furthermore, I would argue that a good monetary regime is transparent, predictable and well understood by the general public. Hence, rules are preferable to discretion as a general principle.

And finally the monetary regime should be robust. That implies that the risk of a “highjacking” or a politicization of the monetary system should be as small as possible. Hence, a certain regime might produce a good outcome today, but if the same regime tomorrow is likely to be taken over by certain political interests then we cannot say that the regime is “good”.

Furthermore, a robust monetary regime will ensure a “good” outcome under different shocks to the economy, changes in the political climate or even changes to political institutions. Therefore a regime cannot be said to be robust if it only “performance” well under demand shocks, but not under demand shocks or is overly sensitive to political uncertainty and crisis.

Finally, I would argue that a robust monetary regime is as little dependent on human judgement and data as possible. Hence, we can imagine a perfect monetary regime, which ensures an extremely high degree of nominal stability, but it can only be implemented by Alan Greenspan. Such a regime certainly would not be robust.

Concluding, a good monetary regime ensures a high degree of nominal stability, is transparent, predictable and is robust economically, political and institutionally.

It isn’t hard to see that no monetary regime will always be good across countries and time. Hence, I think that NGDP targeting regime as advocated by Market Monetarists would approximately be a “good” monetary regime for the US, but it would likely not work as well as alternatives in low-income countries with weak economic and political institutions.

Monetary regime trade-offs

The choice of monetary regime therefore ultimately is about trade-offs between how well different regimes “score” on the overall criterion for a “good” monetary regime.

Overall I have no doubt that two regimes – in the textbook form – can described as being “good” regimes and that is Free Banking and NGDP level targeting. Similarly I would argue that in the strict theoretical form inflation targeting and a fixed exchange rate regime cannot a priori be considered as being good monetary regimes as both regimes will distort relative prices and hence not ensure nominal stability.

However, these are textbook examples. In the real-world (an expression I hate…) we are facing the choice between imperfect systems. For example it is clear that a George Selgin style textbook Free Banking system would ensure nominal stability. However, we can also historical conclude that Free Banking systems have tended not to survive for long. Not because they didn’t ensure nominal stability – they to a large extent did – but they just didn’t turn out to be robust enough.

On the other hand some monetary regimes have been very robust even though they have been less optimal from a nominal stability perspective. The Danish pegged exchange regime, which essentially has been in place since 1982 has been very robust. It has survived numerous domestic and external shocks, financial crisis and political uncertainty. However, it is not hard to argue that at least in theory a NGDP targeting regime with a floating krone would give more nominal stability than the pegged exchange rate regime. But the crucial question is that if the improvement in terms of nominal stability is relative small would it then be worthwhile experimenting with more than 30 years of robust and high-predictable rule based monetary policy regime?

Finally and this is what got me to think more deeply about these issues is the experience with monetary policy in Iceland since the country became independent in 1944. Hence, Iceland has only have short periods of nominal stability, while we again and again have seen episodes of high inflation, banking crisis and general monetary and exchange rate instability.

Thinking about Iceland’s historical monetary dysfunctionality is increasingly leading me to think that there simply is a near-natural impossibility of ever ensuring nominal stability in Iceland as long as country maintains monetary sovereignty and the best way to solve this problem of lack of robustness in the monetary system would simply be to “outsource” the monetary regime – either by introducing a currency or even better through dollarization (for example by introducing the Canadian dollar or the Norwegian krone).

However, getting rid of monetary sovereignty in Iceland comes with a trade-off. Hence, by giving up the króna would likelu get less nominal stability on for example a textbook NGDP targeting regime.

However, by comparing a less than perfect dollarization regime for Iceland with a textbook NGDP targeting regime would be what Harold Demsetz termed a Nirvana Fallacy. Hence, Demsetz would have told us to choose between different economic institutions (here monetary regimes) based on real institutions arrangements rather than comparing an “ideal norm” and an “imperfect” regime.

Such a comparative-institutionalist approach would make us choose among imperfect alternatives – for example in the case of Iceland the present not very robust sovereign monetary regime and for example a regime with dollarization of some form.

Monetary revolution, monetary evolution and windows-of-opportunity

Such an approach also tends to make us more humble when we discuss different alternatives to real exiting monetary regimes. That does certainly not mean that the status quo is preferable. Far from it, however, it does mean that some times we should simply accept exiting monetary institutions and arrangements as the best we can get – at least until we get a window-of-opportunity to change things. Such window-of-opportunity could be economic, financial or political crisis or a change in political sentiment. In the case of Iceland I think that we might be approaching such a window-of-opportunity in the next couple of years.

So even though I feel somewhat uncomfortable with being this pragmatic and feel I sound like Hayek I will have to say that monetary evolution often will make more sense than monetary revolution.

However, that does not mean that we should not advocate change. We certainly should, but maybe it makes most sense to focus on ideas of monetary reform rather than throwing ourselves into discussions about minor changes in actually “calibration” of monetary policy in a given monetary set-up. Frankly speaking who cares whether the Federal Reserve should hike interest rates in May or in August? Isn’t the important question how we can change the monetary setting to ensure nominal stability for the longer run?

I remain a proud advocate of NGDP targeting, but I would like to think of NGDP targeting as a “ideal regime” that might or might not be possible to implement in different countries. We can hence, use NGDP targeting (and Free Banking) as a benchmark for both how present monetary policy is calibrated and as benchmark to compare different real-lift monetary institutions.

Re-visiting Iceland – Options for monetary and currency reform in Iceland

Earlier this week I re-visited Iceland on the invitation of the Icelandic bank Islandsbanki. I had been invited to give a presentation on the topic of “Options for monetary and currency reform in Iceland” after the expected lifting of capital controls.

I ended up giving numerous interviews to the Icelandic media as well.

My main message in my presentations and interviews that Iceland needs monetary and currency reform to ensure nominal stability. My view presentations and interviews centered on the need for a “monetary constitution” for Iceland – either in the form of a strict rule-based monetary policy within the present currency set-up or monetary “outsourcing” through a currency board or outright dollarization.

I warned against euro adoption (which seems completely unrealistic given the fact Iceland is not an EU member and given the present euro crisis) and I equally warned against old style fixed exchange rate regime as the worst thinkable “halfway-house” between a sovereign monetary policy and complete monetary outsourcing.

Here are some links to these presentations and interviews:

The main presentation – “Iceland after Currency Controls” (my part starts after 15:10)

A wrap-up interview on my presentation (with Björn Berg Gunnarson)

Another interview with Björn Berg Gunnarson – about the Russian economy.

An interview with the Icelandic newspaper Viðskiptablaðiðpart 1 and part 2

An interview with Þorbjörn Þórðarson on visir.is

Needless to say I greatly enjoyed once again visiting Iceland – a country that I have visited often since I in 2006 co-authored a rather critical research paper – Geyser crisis – on the outlook for the Icelandic economy.

Thanks to all my friends in Iceland!

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Information for non-Icelanders: Sedlabanki is the Icelandic central bank, Bjarni “Ben” Benediktsson is the Icelandic Minister of Finance and Stjarnan FC is my favourite Icelandic football team. Stjarnan won its first Icelandic championship in 2014 and had great success in the European cup (UEFA Europa League) by beating among other Scottish Motherwell and Polish Lech Poznan.

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