Nobel Prize-winning economist Paul Krugman is not a lover of economic austerity procedures. He proposes that populist strife across Europe that has resulted from a tightening up of the purse strings has done absolutely nothing great for consumer confidence or economic recovery. Just because a government reduces spending doesn't mean that all will abruptly become right in the world.
Signs of revolt
Krugman makes it clear that while no brand new policy against austerity has been initiated, people are done with austerity measures and the officials who passed them in European nations. Lots of people have lost their jobs in these nations because of revolt over the measures. Candidates against austerity measures were voted for by the strong majority of people on May 6 when both France and Greece held political elections.
French President Nicolas Sarkozy's economic strategy was definitely not really working, according to Krugman. Still, Franois Hollande's defeat concerns the Economist. It believes that Hollande is taking a dangerous path with the new policies.
No longer working yet
The austerity measures were started in an attempt to try and get outcomes in the tough economy. The problem was that people could not spend more because they did not have the money with all spending slashes and job eliminations. The economic depression just got worse with the measures.
Ireland was among the nations that did austerity measures, although it did these measures simply to help the country's standing in bond markets. This was something expected to work, and the press called it success in spite of the fact that it really was not. In fact, Ireland's borrowing costs stayed very high while all other borrowing in nations decreased a ton.
Looking to the future
Europe itself would not be doing this badly without the euro, according to Krugman. He believes that Greece, Spain and Ireland would not be hurting Europe as a whole if they had their own currency. Iceland let the krona banks fail, and now it is beginning to recuperate again. Cost-competitiveness could possibly be restored, and countries could export depending on devaluation of currency.
There might be issues for a while when the Euro is killed, but eventually Europe would become whole again and would be better than ever. Krugman does point out that the European Union would become obsolete with the change. He also claims that one choice that could help every person is having nations with increased inflation helping their neighbors out through trade. He believes this could really help everyone's economy.
According to Krugman, none of this will work unless the European Central Bank changes from thinking about inflation to thinking about economic growth.
Signs of revolt
Krugman makes it clear that while no brand new policy against austerity has been initiated, people are done with austerity measures and the officials who passed them in European nations. Lots of people have lost their jobs in these nations because of revolt over the measures. Candidates against austerity measures were voted for by the strong majority of people on May 6 when both France and Greece held political elections.
French President Nicolas Sarkozy's economic strategy was definitely not really working, according to Krugman. Still, Franois Hollande's defeat concerns the Economist. It believes that Hollande is taking a dangerous path with the new policies.
No longer working yet
The austerity measures were started in an attempt to try and get outcomes in the tough economy. The problem was that people could not spend more because they did not have the money with all spending slashes and job eliminations. The economic depression just got worse with the measures.
Ireland was among the nations that did austerity measures, although it did these measures simply to help the country's standing in bond markets. This was something expected to work, and the press called it success in spite of the fact that it really was not. In fact, Ireland's borrowing costs stayed very high while all other borrowing in nations decreased a ton.
Looking to the future
Europe itself would not be doing this badly without the euro, according to Krugman. He believes that Greece, Spain and Ireland would not be hurting Europe as a whole if they had their own currency. Iceland let the krona banks fail, and now it is beginning to recuperate again. Cost-competitiveness could possibly be restored, and countries could export depending on devaluation of currency.
There might be issues for a while when the Euro is killed, but eventually Europe would become whole again and would be better than ever. Krugman does point out that the European Union would become obsolete with the change. He also claims that one choice that could help every person is having nations with increased inflation helping their neighbors out through trade. He believes this could really help everyone's economy.
According to Krugman, none of this will work unless the European Central Bank changes from thinking about inflation to thinking about economic growth.
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