Friday, April 02, 2010


The IMF should impose default on Greece to end the charade
Real GDP has fallen by less, 12.6pc. The rest is the effect of deflation. But what matters most for debt is nominal GDP. The same debt load has to be financed from a nominal economy that has shrunk by almost a fifth. That is why deflation can be so deadly, as it was from 1930-1933.

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