REG: All right, but apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, a fresh water system, and public health, what have the Romans ever done for us?
XERXES: Brought peace.
REG: Oh. Peace? Shut up!
– Monty Python’s Life of Brian
Paul Krugman making the case for currency devaluation. All that’s missing is the classic Monty Python quote above.
Menzie Chinn goes after Paul Ryan’s challenge: “Name me a nation in history that has prospered by devaluing its currency.” But why go back to the 1930s?
-Britain, which recovered strongly from its early 90s doldrums after it devalued the pound against the mark in 1992. (At the time, some wags suggested putting a statue of George Soros in Trafalgar Square.)
– Sweden, which recovered from its early 90s banking crisis with an export boom, driven by a devalued kronor.
– South Korea, which roared back from the 1997-1998 crisis with an export boom, driven by a depreciated won.
– Argentina, which roared back from its 2002 crisis with an export boom, driven by a depreciated peso.