- 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.
The Euro Tends To Worsen Economic Crisis, Can Anything Be Done About That?
April 12th, 2018 · No Comments