The Eurozone is a polarise economic model.

Discussion in 'Economics' started by morganist, Apr 24, 2012.

  1. morganist

    morganist Guest

  2. This was last year's news, ie Krugman - Origins of the Euro Crisis

    International Finance classes are probably using this crisis as a real time example of the failures that can arise in a currency union.
     
  3. morganist

    morganist Guest

    Yes but you could argue that the explanation I gave provided a reason for why the situation will deteriorate further and become more polarised. Plus I backed up the argument with data.
     
  4. morganist

    morganist Guest

    I had a look at that article but I didn't see it claiming the aggregated currency value caused the trade deficit. This is something I strongly argue and then conclude that the trade deficit was as a result of this. The article you posted is the other way round and I don't think it addresses the impact of the aggregate currency value as a polarising factor that will deteriorate over time.

    In short it states there is a trade deficit but doesn't fully explain why it happened or why it will get worse, which I believe my article does.
     
  5. What you're calling the trade deficit has a more specific term, current account deficit.


    Spain:

    <IMG SRC=http://research.stlouisfed.org/fred2/data/CUAEEFESQ052N_Max_630_378.png>
    They may have realized the problem and things are self correcting.

    For Italy:

    <IMG SRC=http://research.stlouisfed.org/fred2/data/CUAEEFITQ052N_Max_630_378.png>
    Ain't a damn thing changed and is problematic.


    Greece is out this morning projecting a worse 2012 GDP forecast but a better currenct account deficit for the year.

    Things could get worse but no one knows. At least the CA's are improving for some of the problem countries.
     
  6. morganist

    morganist Guest

    I would argue that is only because of the investment from the rest of the Eurozone.

    The point I am making is the reason behind the deficit and how it is likely to deteriorate. The strong will become stronger and the weak will become weaker.