Saturday, March 16, 2013
Eurozone Fiscal Policy Contributes To Eurozone Recession
The eurozone in in recession and Paul Krugman argues that eurozone fiscal policy is partly responsible for the recession. The eurozone as a whole should be stimulating the economy with fiscal policy. Some countries have fiscal austerity imposed on them, but other countries like France and Germany, do have an opportunity to expand their economies. France has a contractionary fiscal policy and Germany has a neutral fiscal policy. As a result the cyclically adjusted primary balance in the eurozone is contractionary.
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