Further Austerity and Wage Cuts Will Worsen the Euro Crisis
This note argues that the solutions to the euro-area crisis proposed by the EU governing institutions in cooperation with the IMF, based on further austerity and wage cuts, will worsen the crisis. They are unlikely to reduce both sovereign and external debt ratios of countries experiencing these problems. Quite in contrary, they are likely to further reduce the real GDP growth of these countries.
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Economics Working Papers
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- Ponticelli, Jacopo & Voth, Hans-Joachim, 2011. "Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008," CEPR Discussion Papers 8513, C.E.P.R. Discussion Papers.
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- repec:ebl:ecbull:v:6:y:2008:i:25:p:1-11 is not listed on IDEAS
- Augusto Graziani, 2002. "The Euro: An Italian perspective," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(1), pages 97-105.
- Olivier Blanchard, 2007. "Adjustment within the euro. The difficult case of Portugal," Portuguese Economic Journal, Springer, vol. 6(1), pages 1-21, April.
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