The German representative on the board of the European Central Bank (ECB), Jörg Asmussen, says that the debate on growth versus austerity is the "wrong debate" since "we [who?] need both." Of course what he means by growth measures is labor market reforms, meaning more flexibility to fire workers (yes with more than 20% of unemployment in Greece and Spain, and double digits for the eurozone it seems that firing workers is really hard in the old continent). That would supposedly reduce the cost of workers, i.e. lower wages, and, as a result firms will hire more workers, even if nobody is buying their goods. And you wonder why things are the way they are in Europe?
PS: For a debunking of the idea that labor market flexibility is necessary for full employment, or that labor market protections cause unemployment, read this paper.
Subscribe to:
Post Comments (Atom)
-
"Where is Everybody?" The blog will continue here for announcements, messages and links to more substantive pieces. But those will... -
There are Gold Bugs and there are Bitcoin Bugs. They all oppose fiat money (hate the Fed and other monetary authorities) and follow some s... -
By Sergio Cesaratto (Guest Blogger) “The fact that individual countries no longer have their own currencies and central banks will put n...
This paper also adds some things about the issue.
ReplyDeletehttp://oit.org/public/english/bureau/inst/publications/discussion/dp16005.pdf
Pablo
Now if we could just get rid of unemployment it would really make those lazy workers more "competitive"!
ReplyDelete