Friday, January 20, 2012

Congratulations to Tom Sargent

I just came back from the New York University dinner gala celebration for Tom Sargent in recognition of his award of the Nobel Prize.  It was a really grand affair in the Plaza Hotel - a wonderful old style New York Hotel with an elegant ballroom.  In his speech, Tom gave an interesting comparison of the crisis in Europe to the founding of the US. (Click here for paper.)   This probably has some insights for the African Union.  Tom spoke about the founding of the United States, the debts held by states versus the central government and the very formation of the United States.  Like Europe, the US at Independence had a weak central government and strong states.  At some point the states had lots of debts, many went belly up, and in negotiations over