It isn't, and that's the problem. The economist says "oh, there's all kinds of options," and the three he has in mind seem to be: 1) a genuine currency union; 2) Scotland piggy-backing on the Westminster pouund, as Pnama and Ecuador do with the US dollar; 3) none of the above (an actual separate currency?).
The problem with 1) is that everybody in Westminster says it's out. And I certainly believe that. The headline makes it sound as if the economist thinks they'll come around, but if they insist they won't then I can't be sure that even a Nobel-winning economist is right and they're wrong. (Milton Friedman was a Nobel-winning economist, and quite spectacularly wrong, as we've learned to our cost.)
The problem with 2) is that this gives up all control over monetary policy, and is a solution adopted only by third-world countries desperate to ditch their own rotting currency. Not Scotland's position. And worry about losing control over monetary policy is the main reason the UK didn't join the Euro. And this scenario is not a "currency union" any more than a bicyclist grabbing on to a car's rear bumper is getting a ride in the car.
And, as you note, Salmond is banking on an actual currency union. As the No spokesperson quoted at the end of the article asks, what's his plan B? There's nothing in the article to answer that question, certainly not this one economist's assurance that Westminster will come around, and emphatically not if by that he means item 2) above (which doesn't require Westminster to do anything anyway: the US does nothing about Panama and Ecuador).
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Date: 2014-09-08 05:03 pm (UTC)The problem with 1) is that everybody in Westminster says it's out. And I certainly believe that. The headline makes it sound as if the economist thinks they'll come around, but if they insist they won't then I can't be sure that even a Nobel-winning economist is right and they're wrong. (Milton Friedman was a Nobel-winning economist, and quite spectacularly wrong, as we've learned to our cost.)
The problem with 2) is that this gives up all control over monetary policy, and is a solution adopted only by third-world countries desperate to ditch their own rotting currency. Not Scotland's position. And worry about losing control over monetary policy is the main reason the UK didn't join the Euro. And this scenario is not a "currency union" any more than a bicyclist grabbing on to a car's rear bumper is getting a ride in the car.
And, as you note, Salmond is banking on an actual currency union. As the No spokesperson quoted at the end of the article asks, what's his plan B? There's nothing in the article to answer that question, certainly not this one economist's assurance that Westminster will come around, and emphatically not if by that he means item 2) above (which doesn't require Westminster to do anything anyway: the US does nothing about Panama and Ecuador).
I'm still not impressed.