Thursday, March 18, 2010

Martin Feldstein Was Right About the Euro

It breeds political conflict between Euro-zone countries. The German real exchange rate advantage derived from diverging inflation rates, and resulting in structural export surplus vis-à-vis partners in the zone, is now openly criticized by other governments, as well as the refusal to further help Greece. And the Chancellor, Angela Merkel, replies by now saying that expulsion from the Euro should be an option. Most other European politicians disagree.

Read the story in the Wall Street Journal.

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