Tuesday, December 23, 2014

How To Fight Deflation In The Eurozone

It is likely that the EZ will report in January that prices changes were negative in the EZ.  The ECB has a mandate to maintain price stability, therefore, it must do something about price deflation.  The US Federal Reserve used quantitative easing to stabilize prices in the US but it would not work as well in the EZ for many of the reasons presented in this article.  An alternative to QE is proposed for the ECB in this article along with some of the possible objections which are refuted.

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