@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(8/8)

...ever more soft power from the world's policeman, as egotistic as it has been many times, to autocratic regimes is just exasperating.
Sometimes, I wish I were a detached alien 👽 observer.
Then, I'd order more popcorn 🍿, savoring The Fall of the House of America.

//

@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(7/n)

...years to become a likewise safety currency for other countries.
Last week, #Russia was cut off from the international dollar supply. #China gratefully stepped in to fill the gap.
As a strategist, I can only admire how much #Xi's #China has been profiting from the #WarInUkaine.
Turning over...

@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(6/n)

...hypothesis in international finance that suggests differences in nominal interest rates reflect expected changes in the spot exchange rate between countries.")*

*
https://en.m.wikipedia.org/wiki/International_Fisher_effect

Now, if you are the #ReserveCurrency of the #InternationalFinanceSystem, you can evade raising interest rates proportionally for quite some time.
This is why #China has been working for...

@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(5/n)

...because you have to pay ever more of your currency to repay the foreign debt. Also, imported goods become more expensive for the same reason (#ImportedInflation.)
In order to support your currency's external value, you need to increase national interest rates.

(And here, the #InternationalFisherEffect comes into play:
"The international Fisher effect...is a...

@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(4/n)

...well.

Debasing your currency, thus increasing market prices (#inflation) while concurrently devaluating your currency, thus reducing a state's debt in real terms is a tradition that is many centuries old.

The problem with external debt is, however, that if your debts are in another currency, the printing press will not greatly diminish your indebtedness...

@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(3/n)

...the US and the EU within the areas of economics and #PublicFinance that these mainstream economics of the EU are also known stateside as well.

The Federal Government in the US, however, in contrast to the EU Comission, is the biggest offender in the US, impossible to move in any such sensible direction, which, as in #Europe, haunts state governments and municipalities as...

@GhostOnTheHalfShell @economics-that-works

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(2/n)

...of the planned or actual government deficit to GDP exceeds a reference value (defined in the Protocol on the excessive deficit procedure as 👉3% of GD👈), unless...

2. the ratio of government debt to GDP exceeds a reference value (defined in the Protocol on the excessive deficit procedure as 👉60% of GDP👈),..."

I'm quite positive that there are a lot of student exchanges b/w...

@GhostOnTheHalfShell

#Economics #PublicFinances
#US #EU #ConvergenceCriteria

(1/n)

I'd say, in the EU, this is common knowledge, also among #fiscal politicians.
The EU even has statuory limits for state indebtedness within the so-called #ConvergenceCriteria, agreed upon in the #TreatyOfMaastricht in 1991, which are even policed and can and have been also sactioned with fines:

"Article 126 sets out the #ExcessiveDeficitProcedure...

1. the ratio...
@economics-that-works