tag:blogger.com,1999:blog-2277215496195926573.post960668504209670013..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: Greek style austerity is not necessary.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2277215496195926573.post-24726868875897368422011-10-27T07:47:45.090-07:002011-10-27T07:47:45.090-07:00"the bulk of the cost of stuff consumed in mo..."the bulk of the cost of stuff consumed in most countries is the cost of labour in that country"<br /><br />It is actually worse than that. It is real estate and housing costs which is the bulk of cost of labour and production. Austerity should be about deflating real estate. But we all know that it will kill banks and *can* not be allowedИгры рынкаhttps://www.blogger.com/profile/12001273098690387194noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-33979720460039188702011-10-27T06:24:21.557-07:002011-10-27T06:24:21.557-07:00If countries impose a nominal wage cut but leave n...If countries impose a nominal wage cut but leave nominal debt claims untouched, the result is mass bankruptcies and a cratered economy with huge additional transaction costs to sort throught the wreckage. See for example Greece.<br /><br />Simpler to just stop servicing the debt, leave the Euro and tell the lenders (feckless German bankers / and their Vichy French collaborators) to piss off. <br /><br />After all, what are they going to do, invade? Didn't work out so well the last two times, did it.Anonymousnoreply@blogger.com