The Diabetic Economy in Europe – Paul Krugman – The New York Times

 

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Royal Swedish Academy of Sciences in Stockholm (Photo credit: Wikipedia)

In his NYT op-ed blog, Nobel winning economist, Paul Krugman revisits the chronic economic weakness in Europe and what it means.

Source: The Diabetic Economy – The New York Times

I’ll let you enjoy the article. It’s an easy read.

As expected, Krugman rounded on Germany for underinvestment. But perhaps more surprisingly, he targeted France for under expansion too.

Perhaps, we should remind Krugman that Europe’s fiscal policy is in a strait-jacket because of the Fiscal Constraint formula to prop up the Euro, which is vigorously enforced by Germany and the EU bureaucrats.

Without fiscal policy, it is left to the ECB to help Europe recover. Now that the ECB is close to exhausting traditional tools of monetary policy attention is focusing on injecting helicopter money (see related article).

Personally, in the 2017 elections, I expect voters in both Germany and France to vote for radical change.

Thoughts?

One response

  1. I tried to read the article. Then I got to the part where Kruger mentions that US “unemployment rate is back under 5 percent.” As I am sure Paul knows, this is about the registered unemployment. This number does not count all those who are not eligible for benefits and do not even try to find a job. The number of worked hours, the wages – these are parameters to start measuring recovery, not unemployment figures. So I did not read further. I’m sure Paul knows unemployment figures do not mean much. His reasons for using them? I guess to prove his point, regardless of whether the figures reflect reality or not.

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