Once every several decades, the private sector loses its mind in a bubble, leverages itself up to the hilt, and is forced into debt minimization in order to remove its debt overhang following the crash. When the private sector as a whole is deleveraging, even at record low interest rates,...

type="main" xml:id="geer12028-abs-0001" <title type="main">Abstract</title> <p>When the private sector as a whole is forced into debt minimization following the bursting of a debt-financed bubble, the money multiplier turns negative at the margin and government borrowing and spending become essential in maintaining both the...</p>

AbstractThe following sections are included:Eurozone in Balance Sheet RecessionDestabilizing Intra-Eurozone Capital FlowsAn Endgame SolutionNavigating the Transition PeriodECB Could Buy More Government Bonds to Counter Lender-Side ProblemsConclusionReference