Thursday, November 26, 2009

Feldstein on Euro Zone Survival

« Can the Eurozone survive economic recovery?” asks Martin Feldstein in a paper published by Project Syndicate. While the ECB is now pursuing a very easy monetary policy it will start to raise the short-term interest rate when the eurozone improves, which will be more appropriate for some countries than for others.

Those countries such as Spain, Greece, Ireland or Italy, whose economies remain relatively weak oppose tighter monetary policy and they might benefit from pursuing an independent monetary policy to adjust their currencies to more competitive levels.

Read the complete paper here.

Hat tip to Mark Toma.

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