What Greece can learn from post World War II Britain
July 17, 2015
As Paul Krugman points out, Britain after World War II was heavily in debt. The country faced a world economy with rising prices, but nonetheless sharply devalued the pound in 1949 (see chart above).
As Krugman explains:
“If Greece still had its own currency, the case for devaluation would be completely overwhelming at this point. What this means, in turn, is that everything — the ongoing economic disaster in Greece, the bitter divisions within the euro area, the perplexity of even the best intentioned policymakers — flows from the supposedly insuperable technical difficulties of going off the euro. Can this possibly make sense given the extremity of the situation?”
Posted in: Infographic of the day