Benn Steil

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Why Easy Money Is Not Enough: U.S. vs. the Eurozone

by Benn Steil and Dinah Walker
March 20, 2013

unemployment dispersion

European Central Bank president Mario Draghi has promised to do “whatever it takes to preserve the euro,” and the bank’s Outright Monetary Transactions initiative last September, aimed at pulling down crisis-country bond rates, no doubt calmed market fears of a eurozone breakup. But whereas eurozone sovereign bond spreads have narrowed, the gap in real economic performance – particularly unemployment – between the best and worst performers, as shown in today’s Geo-Graphic, has continued to grow precipitously. Compare this to the United States, which has a fiscal and banking union as well as a monetary one. There, jumps in unemployment rate dispersion across states caused by financial and other shocks are reversed in relatively short order.

Draghi: “Whatever It Takes”
Bini Smaghi: Ireland Points Way for Cyprus and Euro Periphery
IMF: Europe Needs Banking Union
Bordo, Jonung, Markiewicz: Some Historical Lessons on Fiscal Union

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  • Posted by ibrahim mammadzadeh

    eurozone unemployment seems more deep than we can see it; because last 5 years their economies generating easy money by encouraging the irrational labour even in Germany and France

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