School of Economic Science - Study Forums

[Anthony Werner]

The front page of The Times (19/10/2011) carried an article about an economics prize set up by Lord Wolfson (CEO of Next). The article begins: ‘One man is offering you the chance [to win £250,000] and all you have to do is answer one simple question: how do you manage a country’s orderly exit from the Euro?’

There was also an article by Lord Wolfson explaining why he was setting up the prize.

’Just as man can be dwarfed by the power of nature, so might governments be humbled by the force of markets. There is a possibility that the structural flaws at the heart of European economic and monetary union pose such a challenge and that the euro could break up in a disorderly rout ... The unplanned disintegration of the euro would endanger the financial stability of sovereign states and the world’s banking system, along with the savings and jobs of millions. The damage could take a generation to repair.’

Any suggestions for helping Lord Wolfson? Here are the links to the articles in case you have access to The Times

http://www.thetimes.co.uk/tto/business/economics/article3199207.ece
http://www.thetimes.co.uk/tto/opinion/columnists/article3198864.ece

[Peter Fennell]

Dear Anthony,

As Englishmen of course we are against the Euro. And it may create technical difficulties for the weaker countries in it. But do we have a problem with it on principle? My understanding of the Greek problem may be misguided but I have the impression that there was too much living without working and too little paying of taxes and that these things pre-dated the Euro. Has the Euro perhaps cast light on a culture of corruption that is the cause of the weakness?
Now they are trying to implement a property tax:
http://www.telegraph.co.uk/finance/financialcrisis/8793416/Greek-lawmakers-pass-controversial-property-tax.html
Per sqm rather than per value so hopelessly wrong but clearly a recognition of the area that needs addressing.

The answer to Lord Wolfson’s question may be: clear out the rot, recover strength, and then you can probably exit the Euro in orderly fashion. Or not.

Yours,
Peter

[Richard Glover]

Policy Exchange appears to be the controlling organisation for the prize. Attached is what appears to be the full brief obtained from: http://www.policyexchange.org.uk/assets/Wolfson_PR_EN.pdf. It includes many specific details to be covered.