EU policy makers are treating a demand crisis as if it were a - TopicsExpress

EU policy makers are treating a demand crisis as if it were a supply crisis by imposing reforms. Paul De Grauwe: “They are doing everything they can to stop recovery taking off, so they should not be surprised if there is in fact no take-off. It is balanced-budget fundamentalism, and it has become religious. We know from the 1930s that if everybody is trying to pay off debt and the government then deleverages at the same time, the result is a downward spiral. The rigidities in the European economy have been there for ages. They have absolutely nothing to do with the problem we face today.”

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