One measure of deflationary pressure

Three days before Ireland’s crucial referendum on the eurozone’s fiscal pact – a vote that could complicate further the debate over austerity in Europe– the citizens of Clones are already taking matters into their own hands. Butchers, bar owners, shopkeepers, barbers and ordinary citizens of the County Monaghan town have in effect resurrected the old Irish currency bearing the faces of past Irish heroes such as Catholic emancipator Daniel O’Connell as the punt exchanges hands and is tucked into the tills.

They are all taking part in an experiment to boost a town ravaged by the economic downturn. It exploits a financial loophole which deems that up to 285m punts stuffed under Irish mattresses, inside piggy banks, salted away as souvenirs in shoeboxes or in latent bank accounts, are still legal currency.

Holders of the old currency are invited to visit Clones and hand over their punts in exchange for blue and yellow laminated vouchers which are then usable at any of the 45 businesses that have signed up for the scheme.

This is one inefficient way of individuals trying to manufacture their own nominal gdp, attached to a possible efficient method of price discrimination.  The plastic coupons, by the way, were printed in China.

The article is here, and for the pointer I thank Tracy Wilkinson.