15 Nov 2012

How to avoid a double-dip recession in the eurozone

Paul De Grauwe

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This CEPS Commentary argues that the way in which the burden of adjustment to the imbalances in the eurozone is borne almost exclusively by the deficit countries in the periphery produces a deflationary bias in the region as a whole. Against the threat of double-dip recession, Paul De Grauwe asserts that the adjustment could be done differently and calls for implementation of a more symmetric macroeconomic policy that reduces the deflationary bias.

Paul De Grauwe is Professor at the London School of Economics and Associate Senior Fellow, CEPS.