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The Euro Tends To Worsen Economic Crisis, Can Anything Be Done About That?

April 12th, 2018 · No Comments

  • Countries suffering from economic crisis have no recourse to normal adjustment mechanisms like devaluing or independent monetary policy tools.
  • What’s more, there is no automatic redistribution through a big federal budget, and capital flows are likely to be perverse, going from the weak to the strong.
  • On top of that, all the adjustment pressure is on the weak countries, creating a deflationary bias for the whole eurozone.
  • Now that there is fairly solid growth, the search is on to lessen these problems before the next downturn hits.

Source: The Euro Tends To Worsen Economic Crisis, Can Anything Be Done About That? | Seeking Alpha

Tags: Eurocrisis