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Comment on "Asymmetric Shocks in a Currency Union with Monetary and Fiscal Handcuffs"

  • Economics


Comment This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: NBER International Seminar on Macroeconomics 2010 Volume Author/Editor: Richard Clarida and Francesco Giavazzi, organizers Volume Publisher: University of Chicago Press Volume ISBN: 978-0-226-10736-3 (cloth); 0-226-10738-8 (paper) Volume URL: Conference Date: June 18-19, 2010 Publication Date: September 2011 Chapter Title: Comment on "Asymmetric Shocks in a Currency Union with Monetary and Fiscal Handcuffs" Chapter Authors: Hans-Helmut Kotz Chapter URL: Chapter pages in book: (p. 143 - 151) Vulnerable in particular were those sectors that had, on the back of vocabulary this would have been called “overaccumulation,” all of this calling for a deep, structural adjustment process, having essentially to do with the supply side. This is, in a broad-brushway, the scenario onwhich Christopher Erceg and Jesper Lindé want to shed light. Presenting a very well-written and “fiscal space” to give their peripheral brethren a helping hand via a strongly discretionary budgetary impulse. In fact, this was an argument also frequently referred to in the debates (and deliberations) in the Group convincingly structured paper, which was definitely a pleasure to read, theymake at the same time a policy proposition that flies flatly in the face of at least prevailing European perceptions. Namely, they suggest that bigger countries with a more sustainable debt position should use their low interest rates, generated capacities (especially in the construction sec- tor), which were (ex post) seen as economically nonviable. In an older Comment Hans-Helmut Kotz, Albert-Ludwigs-University, Freiburg and Center for Financial Studies, Goethe University, Frankfurt Persons attempting to find a motive in this narrative will be prosecuted. Mark Twain, epigraph to Huckleberry Finn I. European Monetar

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