- Short video lecture by Tanweer Ali with transcript
- Things you need to know about the Greek crisis – vox
- Maastricht and All That by Wynne Godley
- The Case Against EMU – Feldstein on Euro pros and con, Economist 1992
- The Body Economic: Why Austerity Kills – read the whole book
- Mark Blyth on the dangers of austerity – video
- Functional finance by Abba Lerner
Optional supplementary readings:
Discussion questions:
Please take part in at least two of the following discussions. As well as posting yourself, you should also respond to other people’s posts – we recommend you post at least two replies:
1. As early as in 1992, some economists warned that the creation of the common currency in Europe would create more problems than it would solve. What do you consider to be their strongest argument against the common currency?
2. Politicians and media commentators often tell us that austerity is necessary because it is common sense that anyone who is in debt needs to cut down on their spending. This idea is dependent on the comparison with households – any family that has spent too much and got into debt needs to start cutting down on their expenses. In the video lecture I explain this is an example of a fallacy of composition. In what ways is government debt different from the debt of a household?
3. In what ways could your country could use the idea of functional finance?
4. What kind of policies are labeled ‘austerity’? What type of problems does austerity intend to solve? What kind of problems does it create?
Assignment:
The Body Economic book contrasts two types of policies at the time of a crisis. One set of policies reduces the society’s well-being and the other improves it. Describe the two sets of policies, their impact, and give examples of countries where they were implemented.
2-3 pages, up to 750 words.