Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121989
Authors: 
Papadimitriou, Dimitri B.
Wray, L. Randall
Year of Publication: 
2012
Series/Report no.: 
Public Policy Brief, Jerome Levy Economics Institute of Bard College 122
Abstract: 
President Dimitri B. Papadimitriou and Senior Scholar L. Randall Wray argue that the common diagnosis of a "sovereign debt crisis" ignores the crucial role of rising private debt loads and the significance of current account imbalances within the eurozone. Profligate spending in the periphery is not at the root of the problem. Moreover, pushing austerity in the periphery while ignoring the imbalances within the eurozone is a recipe for deflationary disaster. The various rescue packages on offer for Greece will not ultimately solve the problem, say the authors, and a default is a very real possibility. If a new approach is not embraced, we are likely seeing the end of the European Monetary Union (EMU) as it currently stands. The consequences of a breakup would ripple throughout the EMU as well as the shaky US financial system, and could ultimately trigger the next global financial crisis.
ISBN: 
978-1-936192-20-5
Document Type: 
Research Report

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