- Jul 4, 2009
- 9,666
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....interesting article...Bernanke comments on the Greek crisis and Germany's part in it and the effects on Europe...
" German unemployment is low, in part, because of the country's strong trade surplus. The trade surplus, in turn, can be attributed to Germany's use of the euro, which Bernanke argues is weaker than a German mark would be if it still existed today."
....and...
"Nobody is suggesting that the well-known efficiency and quality of German production are anything other than good things, or that German firms should not strive to compete in export markets.
What is a problem, however, is that Germany has effectively chosen to rely on foreign rather than domestic demand to ensure full employment at home, as shown in its extraordinarily large and persistent trade surplus, currently almost 7.5 percent of the country's GDP.
Within a fixed-exchange-rate system like the euro currency area, such persistent imbalances are unhealthy, reducing demand and growth in trading partners and generating potentially destabilizing financial flows. Importantly, Germany's large trade surplus puts all the burden of adjustment on countries with trade deficits, who must undergo painful deflation of wages and other costs to become more competitive."
Read more: http://www.businessinsider.com/ben-bernanke-on-germanys-relationship-with-europe-2015-7#ixzz3gRyb9VkN
Cheers
" German unemployment is low, in part, because of the country's strong trade surplus. The trade surplus, in turn, can be attributed to Germany's use of the euro, which Bernanke argues is weaker than a German mark would be if it still existed today."
....and...
"Nobody is suggesting that the well-known efficiency and quality of German production are anything other than good things, or that German firms should not strive to compete in export markets.
What is a problem, however, is that Germany has effectively chosen to rely on foreign rather than domestic demand to ensure full employment at home, as shown in its extraordinarily large and persistent trade surplus, currently almost 7.5 percent of the country's GDP.
Within a fixed-exchange-rate system like the euro currency area, such persistent imbalances are unhealthy, reducing demand and growth in trading partners and generating potentially destabilizing financial flows. Importantly, Germany's large trade surplus puts all the burden of adjustment on countries with trade deficits, who must undergo painful deflation of wages and other costs to become more competitive."
Read more: http://www.businessinsider.com/ben-bernanke-on-germanys-relationship-with-europe-2015-7#ixzz3gRyb9VkN
Cheers
