According to OECD fiscal consolidation ( AKA austerity) is working in Europe. The problem in Europe is poor communications with the public. Leaders have to do a better job of describing the successes of fiscal consolidation. The beatings will continue until morale improves.
Fiscal consolidation worked in Germany because it has an export based economy. Its not possible for every nation in the eurozone to export its way out of trouble by reducing wages and prices to become more competitive. Current account surpluses must be balanced by negative current accounts. Moreover, it is a good idea for some nations to spend less and save more. On the other hand, its a bad idea for every nation to do the same thing. That strategy reduced aggregate demand in the eurozone and has led to a eurozone wide recession.
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