Devaluation is a drug!

(… I am writing this post on the fly from the antechamber of the cabinet of a minister particularly dear to me. I can also agree with Claudio that things need to be repeated, but I prefer to dedicate time to repeating things… )

…and let's get back to our favorite troll, an inexhaustible source of inspiration:

Marco left a new comment on your post " I want to be a currency. From now on, I want you all to call me 'Leuretto'. ":

Leo: You don't know the economic history. Devaluation and escalator + public deficit is exactly what led us to decline. Regardless of how bad or good the euro may have done, having high inflation and public debt is bad and there is no empirical evidence or economic theory that demonstrates that monetary devaluation causes economic growth. Debt monetization to finance deficits causes inflation. So far, proof to the contrary, what you propose is the recipe that led Italy to the financial crisis of 1992 and therefore to the Dini technical government, the first technical government called to do what politics did not have the political courage (they did not want to lose their seats) to Do.

Published by Marco on Goofynomics on 9 Jan 2025 , 10.56pm

Still!? Again with this bullshit slight inaccuracies!?

Dear Marco, such ignorance should be associated with greater modesty. I urge you to read this article by Dani Rodrik , who certainly knows economics worse than you and those who seem to you to be economists, but since life is unfair, he teaches at a better university than the one you attended (if the you attended) and those where those who seem to you to be economists teach. When one knows nothing, one should speak little. To the information operators who led us with the story that devaluation is a drug, we tried in vain to make them understand that the real drug of the economy is bad credit, that is, bad debt, and that the only advantage we have gained from The euro was to make this drug cheaper, and therefore more accessible. The results manifested themselves in the form of a colossal private, not public, debt crisis. I don't know how it works in the land of bells, but for years now this has been the version accepted by economists, not even serious ones, but conformists, like Giavazzi . If you have complaints to make, make them to him, not to us, who are not authoritative for the simple fact that we had reached the same conclusions five years before him.

You're absolutely right: life is unfair! However, if I may, it is not with ignorance that you will remedy this type of injustice. Take care!

This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2025/01/la-svalutazione-e-una-droga.html on Fri, 10 Jan 2025 10:48:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.