Fiscal Localism and Inflation Taxes

Heard this on the way back from the pediatrician today...


(Link here for the script-impaired.)

One interesting part is how the published exchange rate for these local currencies is 1:1 with the Euro, but that they depreciate at a fixed rate. Then, you can purchase stamps from the local government to "re-charge" the value of the notes. This is quite literally an inflation tax, although it is somehow seen as a positive thing for the local residents because they can see and connect with the public goods and services those taxes purchase.

The Deficit Effect of a Tax Cut

Neat Picture via Krugman:

Making the right conlusion with the wrong data

I think there's good reason to extend unemployment benefits (but not make them more generous per week), but this was the wrong data to use.








Here's an interesting discussion on NPR with Ken Rogoff.

Some more trade & migration links

Mobile phones and remittances (Economist, here; DNAIndia, here)
Migration the crisis (People Move)
Remittances vs. private capital flows (People Move)
Protectionism: Deadly but Tasty, especially during depressed times (Free Exchange)
    Also: Did trade restrictions lead to the depression (as Hayek asserted) or vice versa? (Paul Krugman)
Ruminations by Menzie Chinn