Monetary Expansion Works: Poland Edition

Fresh from touting the success of Israel’s single-payer health care system, Mitt Romney hopped to Poland, where he praised the success of Polish macroeconomic management. And indeed Poland weathered the crisis pretty well. Matt O’Brien notes that this is largely due to the fact that Poland engaged in massive currency debasement—seen above—at the height of the crisis.

This is, I think, the closest thing you can find to a constant across countries that handled the crisis well. Smaller countries, from Poland to Israel to Sweden, were willing to engage in a form of expansionary monetary policy that primarily took the form of currency devaluation. Things look a bit different from the standpoint of a larger, less trade-oriented country but the same basic principle ought to apply.