Bruce Bartlett brought my attention to this article, which Mark Thoma mused was “The Stupidest Article Ever Published”. From The Inflation Debt Scam, by Paul Craig Roberts, Dave Kranzler and John Williams:
How much can an independent Scotland rely upon? updated 9/16
As Ronald Reagan once said (although he did mean to say “stubborn”)
Regarding the implications of optimal currency area theory and Scottish independence, Reader Patrick Sullivan continues his reign of error, trying to argue that Canada did just fine, just like a bank crisis-free Scotland in a currency union would:
Canada didn’t have a central bank until sometime in the 1930s, and had a less severe depression than the USA.
Well, with a little help from Louis Johnston, (who knows economic history much better than I), I generate the following plot:
Figure 1: Log per capita income in 1990 International dollars for Canada (blue) and United States (red), normalized to 1929=0. Source: Maddison and author’s calculations.
I dunno, but these seem to be comparable declines in output. So, yes, no central bank operating until 1935  (p.22), but no, Canada suffers a pretty big shock (Canada on a de facto gold standard until 1931 (p.21)).
It constantly amazes me how people make easily falsifiable statements with such astounding confidence…
So, I think Scotland should consider very carefully independence conjoined with monetary union with England.
A rapid collapse in the Wisconsin fiscal prospects (but pretty predictable, as long as one doesn’t believe in supply side miracles).
Newcomers to macro often encounter problems in interpreting and using data. The first is how to report growth rates, particularly when trying to assess the current state of the economy. The second is how to read data reported at annual vs. quarterly vs. monthly rates. The third is accounting for the presence of breaks in data collection. (This post primarily for students in Econ 435 and Public Affairs 854.)
Mario Draghi signaled at least 700 billion euros ($906 billion) of fresh aid for his moribund economy and left a fight with Germany over sovereign-bond purchases for another day.
And Kansas travels its own path