Greek Debt Crisis: Facts & Debates

For useful sources on the Greek debt crisis perhaps start with the IMF’s overview, especially its FAQs section. Also track the progress of the Greek debt crisis in the Financial Times interactive timeline, which shows key events next to the yield on the 10 year sovereign bond. Find out the global banking system exposure to Greek debt in this August 2011 Cleveland Fed research paper. For thoughts about the pros/cons of sovereign defaults, have a glance at the Economist magazine’s sketch. The Financial Times’ comparison with the 2001 Argentina crisis is worth a look as well as comparisons with the Brady Bond programmes of the 1980s.

A broader perspective, that Greece’s problem is Europe’s problem, is neatly argued by Joe Stiglitz, FT A-List blog, 22 July 2011.

With violence in Athens continuing, and the failure of European leaders to resolve their disagreements over the Greek debt crisis, here are the countries most exposed to Greek debt.

For an in-depth analysis of how history repeats itself, then Reinhart & Rogoff’s “This Time Is Different: Eight Centuries of Financial Folly” is the acknowledged market leader.

The role of capital flows, rather than fiscal irresponsibility, is explored in
Origins of the Euro Crisis, Paul Krugman, 23 Sep 2011 and What Really Caused the Eurozone Crisis?, Kash Mansori, 22 Sep 2011

GDP & Remittances

According to the World Bank, more than 215 million people (3% of the world’s population) live outside their countries of birth. Remittances, the money sent home by migrants, are three times the size of official development assistance and they provide an important lifeline for millions of poor households. Remittances to developing countries are estimated to have reached $325 billion in 2010. The overall economic gains from international migration for sending countries, receiving countries, and the migrants themselves are substantial.

Also have a look at these articles published in July 2011:

Football in Brazil: The bountiful game, The Economist, 21 July 2011
The Philippines and remittances: The house that Saud built, The Economist, 21 July 2011

Europe’s Financial Trilemma

The monetary policy trilemma, often called the Impossible Trinity, is standard macro fare. The basic idea is that, at any one time, countries can only achieve two out of the following three policy objectives: financial integration/free capital flows, fixed exchange rates and monetary independence.

 

A new twist, with a sharp focus on EMU’s current financial crisis, is discussed in the following link:
The financial crisis and Europe’s financial trilemma, voxeu.org, December 2009.