Tuesday, 15 December 2015
EZ problems are largely Germany’s fault?
Simon Wren-Lewis (Oxford economics prof) argues in The Independent that for the first decade or so of the Euro, Germany hammered down costs to an excessive extent and became too competitive. In particular he argues that Germany kept its unit labor costs too low.
Not sure about that.
The target that EZ countries are supposed to aim for is an INFLATION rate of just below 2%. And for the first decade of the Euro, Germany seems to have hit the target near enough, at least according to this source.
Incidentally Bill Mitchell also takes Wren-Lewis to task in a 3,500 word article today. But my 80 or so word criticism above is, needless to say, much more succinct and better value for money..:-)