Abstract
We maintain that it cannot but be the case that there is low inflation in the EMU; actual inflation is hidden below the statistics and the sizeable movements in relative prices which as a result of the credit and monetary expansions, set in motion sizeable reallocations of investment as well as new investment which is, in fact, malinvestent. The flight from euro is documented in the recent increases of gold’s prices, so we hardly need any evidence in addition to that. But the flight from euro can result only as the result of depreciation relative to the US dollar and the associated inflation in the eurozone.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
For a documented flight from the Deutschemark during the hyperinflation see Sargent (1986, pp. 83-84).
Reference
Giavazzi F, Giovannini L (2010) The low interest rate trap, http://www.voxeu.org/article/low-interest-rate-trap
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2014 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Tsionas, E.G. (2014). Fundamental Problems of the Eurozone. In: The Euro and International Financial Stability. Financial and Monetary Policy Studies, vol 37. Springer, Cham. https://doi.org/10.1007/978-3-319-01171-4_21
Download citation
DOI: https://doi.org/10.1007/978-3-319-01171-4_21
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-01170-7
Online ISBN: 978-3-319-01171-4
eBook Packages: Business and EconomicsEconomics and Finance (R0)