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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Year of publication:	2012-02
Authors:	Andini, Corrado ; Cabral, Ricardo
Institutions:	Institute for the Study of Labor (IZA)
Subject:	euro crisis \| austerity \| wage cuts

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Extent:	application/pdf
Series:	IZA Policy Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 37 16 pages
Classification:	E1 - General Aggregative Models ; E4 - Money and Interest Rates ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009646276