Friday, August 13, 2010
I was meaning to relay these two metaphors, both of which are more than a couple of weeks old, before; it just got delayed during my long absence.
First, Tanju Gorgulu, whose book I had reviewed some time ago (although it was under a nom de guerre), likens the fiscal rule formula to the end-year bonus formulas he used to design during his previous life as a finance executive- these were supposed to be designed not to look too dangerous or complicated. As Gorgulu notes, the formulas never substituted for old-school bargaining.
Then, Hasan Ersel likens the attempts to postpone the fiscal rule to a someone canceling catastrophe insurance as the storm appears on the horizon, obviously alluding to the fiscal woes around the globe- I could not find the article, but it should be from mid to late-July.