Panic-driven austerity in the Eurozone and its implications
De Grauwe, Paul, Yuemei Ji. Eurozone policy seems driven by market sentiment. This column argues that fear and panic led to excessive, and possibly self-defeating, austerity in the south while failing to induce offsetting stimulus in the north. The resulting deflation bias produced the double-dip recession and perhaps more dire consequences. As it becomes obvious […]
Can Europe recover without credit?
Darvas, Zsolt. Data from 135 countries covering five decades suggests that creditless recoveries, in which the stock of real credit does not return to the pre-crisis level for three years after the GDP trough, are not rare and are characterised by remarkable real GDP growth rates: 4.7 percent per year in middle-income countries and 3.2 […]
More evidence that financial markets imposed excessive austerity in the eurozone
De Grauwe, Paul, Yuemei Ji. In this Commentary, Paul De Grauwe and Yuemei Ji provide evidence to suggest that movements in the spreads in the eurozone – i.e. the difference between national government bond rates and the German rate – between 2010 and the middle of 2012, when the ECB announced its OMT (outright monetary […]
Is the Euro Crisis Over?
Pisani-Ferry, Jean. Financial crises tend to start abruptly and end by surprise. Three years ago, the euro crisis began when Greece became a cause for concern among policymakers and a cause for excitement among money managers. Since the end of 2012, a sort of armistice has prevailed. Does that mean that the crisis is over? […]
Current-account rebalancing and international transfers (immaculate or not)
Corsetti, Giancarlo, Martin, Philippe & Pesenti, Paolo. Current-account imbalances in Europe are at the heart of the crisis .This column argues that relative price adjustment need not be as dramatic as some observers claim. In order to foster rebalancing, policy should target obstacles to firms’ entry, startup costs, and the incentives for product differentiation, letting […]
Ο Απόστολος Δεδουσόπουλος συζητά με το poleconomix
Poleconomix: Δεδομένων των δημοσιονομικών περιορισμών που αντιμετωπίζουν οι ελληνικές κυβερνήσεις των τελευταίων ετών, τί είδους και προς ποιά κατεύθυνση μεταρρυθμίσεις στην αγορά εργασίας θα έπρεπε να προωθήσουν, προκειμένου να βελτιώσουν τις επιδόσεις της; Απόστολος Δεδουσόπουλος: Νομίζω ότι η ερώτησή σας έχει δύο σκέλη: Αφ’ ενός θέτετε το ζήτημα του ελλείμματος του δημόσιου προϋπολογισμού και του […]
Ο παραλογισμός της γενικευμένης λιτότητας
Βαρουφάκης, Γιάνης. Δύο ελλείμματα βρίσκονται στην καρδιά του «ελληνικού προβλήματος». Το δημόσιο έλλειμμα και το εμπορικό έλλειμμα. Αν τα εξαφανίζαμε, πιστεύουν πολλοί, η Ελλάδα θα ορθοποδούσε. Αυτό όμως που λίγοι βλέπουν είναι ότι, υπό τις συνθήκες Κρίσης, η μείωση του ενός ελλείμματος αυξάνει το άλλο. Κι όταν όλες οι χώρες της Ευρωζώνης πασχίζουν να μειώσουν […]
Euro in Danger (Walters Critique revisited)
The euro is now in clear and present danger, as the Euro-Europeans cannot agree on how to proceed. The analysis of how the troubles started, I think, has been clear for more than two decades now. Basically, the Walters Critique was right. Sir Alan Walters, deceased in 2009, was an adviser to Margaret Thatcher. Πηγή: […]
Will More Integration Save Europe’s Social Model?
Gros, Daniel. At high-level gatherings of the European Union elite, one often hears the following type of statement: “Europe must integrate and centralize economic governance in order to defend its social model in an age of globalization.” European Commission President José Manuel Barroso and his counterpart at the European Council, Herman van Rompuy, are particularly […]
Happy 2013?
Wyplosz, Charles. Financial market quiescence has removed pressure for immediate policy action on the Eurozone crisis. This column argues that while important repairs were made in 2012, the most difficult ones still lie ahead. Much remains to be done by unwilling politicians. Things will have to get worse before they get better. The best hope […]