Debt and savings in the euro area: An update (and how net exports have been keeping the EA afloat so far)

Net exports increasingly support the euro area putting upward pressure on the € and making the EA highly vulnerable

Debt and savings in the euro area: An update (and how net exports have been keeping the EA afloat so far)

The current combination of sectoral balances makes the EA highly vulnerable. If private corporations remain net savers in a weak economy, and if governments consider their current deficit levels just about good enough to meet their fiscal rules, any turbulence originating from a rising value of the euro in the foreign exchange markets or from a further slowdown in the U.S. would leave private savings with no support and set the conditions for another recession.

About Kristjan

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