Over-indebted Youth: Unemployment and Deleveraging in the Euro Zone
AbstractThis paper looks at the Euro-zone crisis from the point of view of the Euro-zone youth. Young people in many Euro-zone countries are today confronted with high and persistent unemployment with potentially long-lasting “scarring effects” compromising their present and future well-being. While lower and sustainable public debts are desirable from the point of view of inter-generational justice, it is argued that this objective cannot be achieved by means of front-loaded austerity policies. With long-term negative consequences of short-term austerity it is shown that not only social consideration but also the underlying public debt dynamics in the presence of scarring and other hysteresis effects make a strong case for a gradual growth-oriented approach to deleveraging that carefully aims at balancing short- and long-term costs and benefits while protecting vulnerable young people.
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Bibliographic InfoPaper provided by Maastricht School of Management in its series Working Papers with number 2013/10.
Length: 21 pages
Date of creation: Sep 2012
Date of revision:
Youth unemployment; scarring effects; hysteresis; debt deleveraging; European Monetary Union; financial crisis;
Find related papers by JEL classification:
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- J4 - Labor and Demographic Economics - - Particular Labor Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-27 (All new papers)
- NEP-EEC-2013-04-27 (European Economics)
- NEP-EUR-2013-04-27 (Microeconomic European Issues)
- NEP-MAC-2013-04-27 (Macroeconomics)
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