A gloomy assessment

Daniel Akst | May 17, 2010

Jan Kregel and Rob Parenteau, respectively senior scholar and research associate at the Levy Institute, offer this analysis of the current crisis in Europe, observing that investor behavior in this case isn’t just moved by animal spirits or orneriness:

This is about more than just testosterone counts. Some wing of the professional investing world is beginning to see the design flaws built into the eurozone from day one. And once the spy these flaws, they begin to realize the nature of the solution is something utterly different than what they are witnessing being rolled out before their very eyes. In the following 11 points, we highlight some of the key aspects of the eurozone predicament using the financial balance approach developed by the late Wynne Godley which we have explored in previous blog submissions, papers, and book chapters. Until more investors and policy makers can understand the true nature of the various predicaments facing the eurozone, and the inherent design flaws exhibited in the European Monetary Union and the (In)Stability and (Lack of) Growth Pact, odds are precious time will simply be wasted trying to make believe the shock and awe fix is already in.

Read the rest here.

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2 Responses to “A gloomy assessment”

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  1. Comment by Jørund Holterud AarsnesMay 19, 2010 at 9:47 am   Reply

    Gloomy and frightening assessment.

    Keep up the good work at the blog. I am having some troubles getting your rss feed to work though.

    • Comment by Editor — May 19, 2010 at 9:51 am   Reply

      Thanks, both for the kind words and the alert about our rss feed. We’ll investigate.

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