EP24 · Economy · first published 2020-06-18
Charts on the Facts: Markka or Federation | Tuomas Malinen | Neuvottelija 24
Tuomas Malinen of GnS Economics and Sami Miettinen work slide by slide through the most common misconceptions about an independent currency and an EU federation. The episode shows that Finnish interest rates were not exceptionally high during the markka era once the currency floated, and that the rate spike came from defending a fixed exchange rate rather than from having one's own money. The discussion presents the GnS simulation of how the markka would have moved during the euro years and its countercyclical effect, and compares US federal tax levels with the EU equivalent. It closes on Puerto Rico's debt restructuring, the broken no-bailout principle, and where a federation's ten-point tax increase would come from.
Charts on the Facts: Markka or Federation | Tuomas Malinen | Neuvottelija 24
Summary: Tuomas Malinen of GnS Economics and Sami Miettinen work slide by slide through the most common misconceptions about an independent currency and an EU federation. The episode shows that Finnish interest rates were not exceptionally high during the markka era once the currency floated, and that the rate spike came from defending a fixed exchange rate rather than from having one’s own money. The discussion presents the GnS simulation of how the markka would have moved during the euro years and its countercyclical effect, and compares US federal tax levels with the EU equivalent. It closes on Puerto Rico’s debt restructuring, the broken no-bailout principle, and where a federation’s ten-point tax increase would come from.
Companion episode: this is the slide-based short version. Published the following day, Neuvottelija 25 is the full-length conversation from the same session, where the same claims are opened up in full.
Key Themes
- The claim about fourteen percent rates in the markka era: Discussed from 00:00 onward.
- Finland’s long rate tracking Sweden and the euro average: Discussed from 01:40 onward.
- Leaving the ERM and Sweden’s five hundred percent rate: Discussed from 03:20 onward.
- The GnS simulation of the markka during the euro years: Discussed from 05:00 onward.
- A countercyclical safety valve and US federal taxes: Discussed from 06:40 onward.
- The EU’s forty-two percent tax burden and the price of a federation: Discussed from 08:20 onward.
- Net contributors transfers and how the US actually equalises: Discussed from 10:00 onward.
- Puerto Rico in restructuring and the broken no-bailout rule: Discussed from 11:40 onward.
- Brexit the net contribution and Italy turning recipient: Discussed from 13:20 onward.
- Moral hazard and where ten percentage points would come from: Discussed from 15:00 onward.