Working Paper: NBER ID: w20862
Authors: Martin S. Feldstein
Abstract: All of the attempts to end the euro crisis and to return the Eurozone countries to healthy growth rates of income and employment have failed. The options that are currently being discussed are not likely to be more successful. \n \nIf there is a politically feasible way out of the crisis, it will be through revenue neutral fiscal incentives adopted by the individual Eurozone countries. I describe some of these fiscal options after reviewing the history of failed attempts and the options that are currently on the table.
Keywords: No keywords provided
JEL Codes: E5; E6; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| interest rate reductions (E43) | increased government spending (H59) |
| increased government spending (H59) | higher debt-to-GDP ratios (H69) |
| austerity measures (E65) | weakened economic activity (F69) |
| weakened economic activity (F69) | fiscal deficits persist (H68) |
| ECB interventions (E52) | stimulate demand (J23) |
| ECB interventions (E52) | economic growth (O49) |
| euro's introduction (F36) | increased debt levels (F65) |