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liabilities | denominator

liabilities denominated Topic in The Credit Debacle Catalog

external liabilities denominated (1); issue liabilities denominated (1).

The Money Game Fri 2010-03-19 12:38 EDT

Kenneth Rogoff's Sovereign Debt Warnings Are So Wrong, It's Like He's Living In A Different Time Period

Marshall Auerback

We've persistently taken the view that there is no economic doctrine, no magic number, which would imply a firm external constraint as far as public spending goes, when dealing with a sovereign government issuing debt its own floating rate, non-convertible currency. At some point, we may indeed have a resource constraint, or an inflation constraint, but not a national solvency issue. Yet the hysteria surrounding fiscal policy has moved from the realm of rational debate and metamorphosed into a matter of national theology...A sovereign government is never hostage to the dictates of financial capital because it no longer faces the external constraint that was always present under a gold standard regime. A nation that adopts its own floating rate currency can always afford to put unemployed domestic resources to work. Its government may issue liabilities denominated in its own currency (for interest rate maintenance reasons or to offer its savers an interest-bearing alternative to cash), and will service any debt it issues in its own currency...

different time periods; Kenneth Rogoff's Sovereign Debt Warnings; lively; Money game; wrong.

Willem Buiter's Maverecon Sat 2009-10-10 13:13 EDT

I know I know nothing; but at least I know that

Willem Buiter

...Except for the important qualifier that the US dollar is a global reserve currency, and that the US government (and private sector) has most of its domestic and external liabilities denominated in US dollars, the pathologies of financial boom, bubble and bust in the US, the UK, Iceland, Ireland and Spain (and many of the Central and East European emerging market economies) track those of classical emerging market crises in South America, Asia and CEE in the 1990s, rather well. The emerging market analogy makes one less optimistic about a robust recovery, as typically, emerging markets whose financial sector was destroyed by a serious financial crisis took many years to recover their pre-crisis growth rates and often never recovered their pre-crisis GDP paths.

know; least; Willem Buiter's Maverecon.

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