INTERECONOMICS, Vol 48, No. 6· November/December 2013
Forum: Inequality in Europe: What Can Be Done? What Should Be Done?
By Maurizio Franzini, Michele Raitano, Tim Callan, Brian Nolan, Claire Keane, Michael Savage, John R. Walsh, Gerhard Bosch, Stéphane Bonhomme, Laura Hospido and Ive Marx
As economic inequality in Europe has continued to rise, it has become the subject of increasing
academic attention. What are the drivers of inequality? How does it affect intergenerational
economic and social mobility? At what point does inequality become a drag on economic growth
or a threat to social order? What economic policy tools are available to reduce inequality? This
Forum addresses these and other aspects of this complex and disturbing trend. Case studies
of Ireland, Germany and Spain also highlight the impact of economic inequality on individual
member states.
Editorial: Can the Eurozone Survive and Be Prosperous?
By Philip Arestis and Malcolm Sawyer
The introduction of the euro went smoothly, and even though economic performance
was sluggish and widening current account defi cits and surpluses were clearly evident,
it appeared to be functioning well through the early years. Although there had
been occasional rumblings in opposition to it, there had not been, until the past three
years or so, any serious contemplation of the withdrawal of a country from the euro or
of the break-up of the eurozone. The budgetary crises, the high levels of unemployment
and the imposition of austerity have not only spawned the eurozone crisis; they
have also led to serious doubts on the future of the euro and whether its continued
existence with the present policies is compatible with prosperity in the Economic and
Monetary Union (EMU).
Letter from America: Rising Inequality, Recession and Slow Recovery: A Sad American Tale
By Barry Z. Cynamon and Steven M. Fazzari
Rewind the clock to the U.S. economy of 2006 and 2007. Unemployment was near historic
lows, inflation was tame and home prices were rising quickly. The broad consensus was
that the U.S. could enjoy the benign macroeconomic conditions of the “Great Moderation”
for years to come.1 But we now know that this conventional wisdom was badly mistaken.
Instead of more Great Moderation, we got the Great Recession. Home prices plummeted,
lending to households dried up and unemployment soared. The recovery, such as it is, has
been disappointing, with no improvement whatsoever in the civilian employment-population
ratio since the official recession ended.