Date: Wednesday 22 Aug 2012
In remarks to the British Broadcasting Corporation (BBC) Bank of England policymaker Adam Posen has broached the two most important subjects in Economics cuurently.
On the subject of what the UK government´s policies ought to be in the current crisis he advises the Chancellor to opt for public investment. "What matters with public debt, just as with private debt, is what you spend it on, so as this set of noted economists ... have come out and said: 'We always said you should do constructive public sector investment, you shouldn't cut public investment, because the point is it's what you spend it on, at what price," Posen said.
"And as long as interest rates are as low as they are in the UK, it doesn't make any sense to sit on the money," he added.
As regards the threat of a dissolution of the single currency area the banker holds the following opinion: “[it would be] a very ill-advised move on the part of anyone looking after Germany's interests [to supervise a break-up on the Eurozone].”
"Germany's currency would shoot through the roof, Germany's trade relations would be disrupted, and Germany's banks would then be on the bailout list instead of poor people and other countries, forever," Posen was quoted as saying.
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