AEI's John Makin examines the consequences of German deflationary policies and Greece's probable exit from the eurozone in the latest Economic Outlook.

At the start of the year, Paul Volcker, the former Federal Reserve Board Chairman who is not known for being an alarmist, issued an ominous warning.

The attention being paid to exchange rates and to utterances about them by finance ministers and central bankers is misplaced.

Attempts at austerity and deleveraging in Europe have converted an economic problem into a political dilemma, with leftist governments rising against Germany's austerity-laced rescue packages. Germany now faces a tough economic decision that will involve choosing between a breakup of the current euro system and a movement toward a common fiscal policy in Europe.

Can the current post-Bretton Woods international monetary system prevent a return to the beggar-thy-neighbor policies and competitive devaluations that so harmed international prosperity in the 1930s? What are the system's flaws? Can they be corrected, and if so, how? An expert panel will address these and related issues.

It is encouraging to learn that the International Monetary Fund no longer promotes the view that emerging market countries should be hastening to carry out rapid capital account liberalisation.

Critics claim that the use of market exchange rates rather than purchasing power parity has led to a significant upward bias in projections of greenhouse gas emissions.

We estimate that a family affordability rule could initially lead to as many as 1.3 million more workers accessing exchange subsidies for themselves and their families than under a single affordability rule. If employees pay 50 percent of the premiums in the future, this number increases to 6 million.