Home > Uncategorized > The WEA internet conference ‘The European crisis’. Tom Vleeschhouwer and Tara Koning

The WEA internet conference ‘The European crisis’. Tom Vleeschhouwer and Tara Koning

Does the Euro need a transnational government to become a succes? According tot Tara Koning and Tom Vleeschhouwer: yes. Do we want such a government? Ehm… Here, their paper for the WEA internet conference on the European crisis, below the abstract.

This paper studies three important problems that have led to or have aggravated the euro crisis: moral hazard in accumulating debt by sovereigns, lack of macroeconomic policy coordination and stabilization, and macroeconomic imbalances. We use both theoretical and empirical evidence to argue that these problems were largely caused by coordination problems. We will then investigate whether a supranational government, a layer of government above all euro member countries, can alleviate these problems. We will find that macroeconomic stabilization and macroeconomic imbalances can be improved by such a government, though moral hazard cannot be solved. The only, but certainly not insignificant, obstacle seems to be that politicians and voters may not be willing to transfer their authority to this government.

  1. October 7, 2015 at 8:05 pm

    There is only one real solution:
    Capitalism MUST have a honest Central Bank.
    Repeat,Capitalism MUST have a honest Central Bank.
    As Frederick Soddy said,”So elaborately has the real nature of
    this ridiculous proceeding been surrounded with
    confusion by some of the cleverest and most
    skillful advocates the world has ever known, that
    it still is something of a mystery to ordinary
    people, who hold their heads and confess they
    are ” unable to understand finance “. It is not
    intended that they should. ”

    “Capitalism is the “best” system to date devised by mankind. As it is administrated, perhaps, is where the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment of the common good, with equality and justice for all, capitalism would be the best ways and means to help “form a more perfect union….”, (Do not recall where exact quote, Believe ( Pontifical Council Report?).

    For any nation or Monetary Union to be a Monetary Sovereign….
    .. it must be the sole creator of its sovereign currency.
    …it must have the ways and means to control its sovereign currency for quality and quantity.
    …it must under modern money systems be fiat since its money is transferable “thru thin air”.
    …it must understand that it is the guardian of the value of the currency , if it wishes to be capitalistic; otherwise that nation will be totalitarian. As a guardian (recording and exchanging) it does not own the value of the currency it creates as it is owned by the community in part and by individuals in part.
    …it must use that currency knowing that it must also return it back to the community (the rightful owners).
    …all transactions using sovereign currency must be “REAL”, meaning backed by 100% of issued sovereign currency. All that has been issued backed by “reserves” must over time be converted to loans from the Central Bank, the sole issuer of the currency.In order to prevent “systemic failure” it must make available the currency as loans at a fixed rate and duration in amounts deemed necessary to allow the private banking system to be solvent.
    Comments by Justaluckyfool ( http://bit.ly/MlQWNs )
    ( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)
    Read and challenge:
    Frederick Soddy writings, namely “The Role Of Money”
    (Entire book as a free download) http://archive.org/details/roleofmoney032861mbp
    PREFACE
    “…It was recognized in Athens and Sparta ten centuries before the birth of Christ that one
    of the most vital prerogatives of the State was the sole right to issue money. How curious that
    the unique quality of this prerogative is only now being re-discovered. The” money-power ” which
    has been able to overshadow ostensibly responsible government, is not the power of the merely ultrarich, but is nothing more nor less than a new technique designed to create and destroy money
    by adding and withdrawing figures in bank ledgers, without the slightest concern for the interests of
    the community or the real role that money ought to perform therein.
    The more profound students of money and, more recently, a very few historians have realized
    the enormous significance of this money power or technique, and its key position in shaping the
    course of world events through the ages. In this book the mode of approach and the philosophy
    of money is expounded in the light of a group of new doctrines, to which the name ergosophy is
    collectively given, which regard economics, sociology, and history with the eye of the engineer
    rather than with that of the humanist. It is concerned less with the details of particular schemes
    of monetary reform that have been advocated than with the general principles to which, in the
    author’s opinion, every monetary system must at long last conform, if it is to fulfil its proper role
    as the distributive mechanism of society. To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.”

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