Nobel Prize winner for Economics "not surprised if Catalonia becomes independent"

Finn Erling Kydland says new political status would generate financial confidence and attract investment

Laura Matalonga

June 15, 2010 08:56 PM

The 2004 Nobel Prize for Economics, Finn Erling Kydland, told the Catalan Parliament this Monday that he won’t be surprised if Catalonia reaches independence. Kydland said it would be easier for ‘the Catalan government to show its level of credibility as against the Spanish government as a whole’ in reference to the financial confidence that a state is able to generate with a view to attracting investment in such difficult economic times. During his conference, Kydland drew a parallel between Catalonia and Scotland and also stated that if Catalonia was independent, ‘it could create the same levels of confidence which has allowed Ireland to grow so spectacularly over the last 20 years’.
Kydland works as an economics professor at the University of California at Santa Barbara and is the economic consultant of the Scottish government led by Alex Salmond. The president of the Catalan parliament, Ernest Benach, attended the conference entitled “the coherence of governmental politics and the growth of nations’. The Nobel Prize winner regretted that ‘unfortunately’ many of the economic policies employed to stop the crisis, did not affect future productivity’ and argued that they have not been ‘appropriate measures’. By way of example, Kydland mentioned the European case and the ‘concern’ surrounding the EU's policies to stop increasing unemployment over the last few years. According to Kydland, the policies designed by some states to generate employment, like the Spanish government's so-called E Plan, are “insufficient” measures that do not take a long-term view into account.

Kydland stated that ‘the best way to tackle unemployment is to make sure that long-term incentives are available as well as other more direct solutions, such as compensations for the unemployed or facilitating the movement of workers from those sectors that are no longer profitable towards those which are more promising’. Regarding the solid status of the Euro currency, Kydland is in favour of the greater independence of central banks in order to avoid ‘political pressures’.