April 27, 2014

Europe's Next Moral Hazard

Hans-Werner Sinn, Project Syndicate

The Associated Press

An increase in public debt causes a short-term surge in demand, helping to increase the degree of capacity utilization and keep unemployment in check. However, new debt is nothing but a form of dope, reducing pressure to take painful measures that would improve competitiveness and capacity growth.

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TAGGED: Italy, Spain, Greece, Eurozone, Europe

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