Eurozone’s so-called recovery masks a dark secret: mercantilism

Eurozone’s so-called recovery masks a dark secret: mercantilism

  1. fiscal austerity leaves export expansion as the only source of recovery;
  2. with no devaluation option, the government of each country must force wages down to reduce production costs;
  3. the low wage route binds the government and the country into persistently depressed domestic demand;
  4. export-led recovery becomes permanent export-led growth; and
  5. since every export surplus has a deficit to match it, the strategy represents, quite literally, “beggar thy neighbour”, as surplus countries recover and deficit countries stagnate……

….Export-led growth is the bad economics of the early 18th century.  Reviving it in pursuit of persistent trade surpluses will fatally undermine the euro zone, then the European Union itself……

About Kristjan

Defitsiidi terrorismi vastase pataljoni eriüksuslane (finantsignorantsuse vastu võitlemise osakond). Treening: MMT, postkeinsism, Tartu Ülikool Majandusteadus
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