The economic and financial crisis in Europe: addressing the causes and the repercussions
AbstractThe article analyses the situation facing the European economy and traces both the more fundamental and the proximate causes of the worsening crisis. It argues that European policymakers have the tools at their disposal to limit the extent and duration of the recession and proposes a package consisting of five elements: expansionary monetary policy; a coordinated fiscal stimulus; anti-deflationary wage policies; continued efforts to stabilise the financial sector; and ad hoc national measures to break negative feedback loops. Proposals are also developed for more medium-term measures to prevent crises in the future and improve Europe's ability to effectively manage its economy. The article concludes that, given the major question marks as to whether, with the current institutional structures, Europe actually will manage to put in place the required coordinated response, a 1929-scenario, while far from inevitable, remains a possibility.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 12337.
Date of creation: Dec 2008
Date of revision:
economic crisis; European policy-making; coordinated fiscal stimulus;
Find related papers by JEL classification:
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
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- Hyman, R, 2010. "Social dialogue and industrial relations during the economic crisis : innovative practices or business as usual?," ILO Working Papers 454502, International Labour Organization.
- Costa Cabral, Nazare, 2010.
"Breve guia temático e bibliográfico sobre o estudo da actual crise financeira e económica
[Short thematic guide to the study of current financial and economic crisis]," MPRA Paper 20743, University Library of Munich, Germany.
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