You may find economics a bit of a pain, and rather discredited, but I enjoy the Real World Economics Website and blog at:
And the article by Dean Baker below has some profound implications for those of us who love Greece. Namely, that based on Argentina’s experience, Greece would do well to leave the Euro, run its own currency, default on its debt, and get on with life and rebuilding its economy on its own terms. Just don’t expect the European banks or Germany, which is planning to crucify Greece with financial bondage, to suggest this. And yes I am sure the rest of the system will feel some pain, which why they should not have let imbalances go so far in the first place.
Ezra Klein’s WonkBlog has an interesting piece asking whether Greece is going to have the dubious honor of having the largest economic downturn in modern history. The piece quotes Uri Dadush, a former World Bank official, who predicts a decline of 25-30 percent, which would beat both Argentina’s 20 percent decline in 1998 to 2002 and Latvia’s 24 percent decline in the current crisis.
The piece is a bit sloppy on one point, saying that Argentina’s decline followed the default on its debt in December of 2001. Actually, the vast majority of the decline preceded the default. Argentina’s economy had already contracted by more than 16 percent by the time of the default. It shrank by around 5 percent following the default before turning around in the second half of 2002.
Source: International Monetary Fund
This matters in the current context since many people are asking what alternatives Greece has to following the austerity path being demanded by the IMF, the ECB, and the EU. While there are reasons that a default would be more difficult in Greece’s case than Argentina’s (most importantly Argentina had its own currency), the post-default experience of Argentina suggests that it probably chose the better route.