An array of Nobel economists have launched a blistering attack on the eurozone’s economic strategy, warning that contractionary policies risk years of depression and a fresh eruption of the debt crisis.
“Historians are going to tar and feather Europe’s central bankers,” said Professor Peter Diamond, the world’s leading expert on unemployment.
“Young people in Spain and Italy who hit the job market in this recession are going to be affected for decades. It is a terrible outcome, and it is surprising how little uproar there has been over policies that are so stunningly destructive,” he told The Telegraph at a gathering of Nobel laureates at Lake Constance.
“It could be avoided with better use of stimulus, and spending on infrastructure. That would boost growth and helped the debt to GDP ratio,” Mr Diamond said, echoing a widely-heard critique among the Nobel elites that Europe’s policies have been self-defeating.
Professor Joseph Stiglitz said austerity policies had been a “disastrous failure” and are directly responsible for the failed recovery over the first half of this year, with Italy falling into a triple-dip recession, France registering zero growth and even Germany contracting in the second quarter.
Chosen excerpts by Job Market Monitor. Read the whole story at Nobel economists say policy blunders pushing Europe into depression – Telegraph.