Forget sovereign debt, think sovereign equity
Why don't countries issue part of their debt with equity-like characteristics to increase stability in crises, just like corporations do? You could have treasuries that pay a fixed percentage of tax revenue, GDP, or even GDP growth to the bearer, rather than a predefined interest rate.
Yes, it's a bit too late for Europe now, but moving forward this could be a useful bit of financial innovation.
Yes, it's a bit too late for Europe now, but moving forward this could be a useful bit of financial innovation.
Sacrifice trade union to save the Euro
Greece and Ireland need to depreciate their currencies, but exiting the Euro is unworkable for either of them. Extraordinary times call for extraordinary measures, so they could both temporarily introduce import tariffs for EU products, as well as potentially recycle some of the money generated to export tariffs.
Imports go down, exports go up, GDP increases, deficit goes down. Of course this doesn't work in the long-run the way depreciation would, but it would work a treat as a short-run stimulus and deficit-reducing measure.
Stata is blogging
Stata now has an official blog, Not Elsewhere Classified. And here's a list of a few unofficial ones.
