We’ll discuss origins and policy options for the crises in Europe and the US. Then
we’ll discuss whether economics, economists, or certain kinds of economics, are part
of the problem or part of the solution.

The monetarist view of the foundations of EMU

􀂃 A determined central bank can always control inflation by controlling money
growth.
􀂃 Fiscal-monetary interaction consists of attempts by the fiscal authorities to get the
central bank to buy more government debt than is consistent with stable inflation,
and is inherently bad.
􀂃 An institutional design with a single, large central bank and a fractured fiscal
authority of many smaller treasuries is therefore less likely to be subject to
inflationary pressure from the fiscal side than is the usual single-country
fiscal-monetary pair of institutions.