A pre-mortem

Aug 13 2013, 05:27 IST
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SummaryAlan Taylor and Kevin O’Rourke have a very good analytical survey of the euro’s problems, putting it in historical perspective

Paul Krugman

Alan Taylor and Kevin O’Rourke have a very good analytical survey of the euro’s problems, putting it in historical perspective. I’d summarise their piece as saying that the euro suffers from all the problems eurosceptics warned about, plus one they didn’t—the dangers of lacking banking union. There’s a particularly good discussion of the problems of “internal devaluation”, with the demonstration that only in Greece, which is undergoing a full-blown depression, has there been any significant fall in wages?

Downward nominal rigidity is a real, important thing.

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