Question:

Why are the eurozone economies in such bad shape? - the credit crunch supposed to be an Anglo- American thing?

by  |  earlier

0 LIKES UnLike

Last Quarter growth:

Italy and France -0.3%

Germany - 0.5%

UK + 0.3

USA + 0.2

why is europe doing worse considering they were supposedly immune from us reckless anglo-saxon capitalists?

 Tags:

   Report

3 ANSWERS


  1. markets are relatively integrated. slow growth in the US affects Hong Kong, Brazil, and Western Europe.  All places that are also capitalist. PLEASE click on the link below.

    The economist explains everything in its latest article. It's not just "Anglo"-America's fault. there have been housing booms in Spain and France, reduced consumer spending, and some other things that are all explained to an extent below.


  2. CHEAP CREDIT FROM THE BANKS.I.E LOW INTEREST RATES WHICH FUELLED A PROPERTY BOOM.IE.. IRELAND,SPAIN,UK..THE BANKS  BOUGHT MASSIVE REPACKED INVESTMENTS WHICH WERE MOSTLY AGAIN CRAPPY MORTAGE LENDING IN THE STATES...THE US SNEEZES AND EUROPE GETS THE FLU...

  3. The creditcrunch has hit European economies as well, both through ripple effects from USA and from Europe's own bursted housing bubble.

    The eurozone centralbank ECB has kept running an inflationfighting monetary policy, while the american federal reserve has run an expansive monetary policy by lowering interest rates.

    USA has also run an expansive fiscal policy by giving out $90 bn of tax rebate checks.

    Keynesian theory shows that fiscal and monetary policy can stimulate (or constrain) the economy in the short run.

    So while the eurozone has run a tight monetary policy, to ward off the inflation caused by rising food and oil prices, USA has run both an expansive fiscal and monetary policy.

    These political factors are just part of the answer. USA has also generally been able to keep a higher rate of economic growth than the large european countries Germany, France and Italy during the last 10-15 years.

Question Stats

Latest activity: earlier.
This question has 3 answers.

BECOME A GUIDE

Share your knowledge and help people by answering questions.
Unanswered Questions