Is Europe’s economic crisis mutating once again? If debt fears are now being superseded by the danger of deflation, as recent data suggest, the European Central Bank has its work cut out for it – and there is nothing to suggest that it is up to the task.
The numbers are alarming. Core inflation (the consumer price index after excluding volatile food and energy prices) in the eurozone fell to an annual rate of 0.8% in October – a 47-month low – while producer prices fell by 0.5%, suggesting that deflation is already in Europe’s economic pipeline. Annual growth of M3 money supply, meanwhile, dropped to 1.4% in October, from an already dismal 2% in September, while loans to the private sector contracted by 2.9% year on year. All of this makes it remarkable that the best the ECB could do at its December meeting was stand pat.
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
Do you like the article?
We are glad you do! Please consider donating if you want to read more articles like this one.
Warning: Undefined array key "visual_appearance" in /austriancenter.com/subdomains/www/html/wp-content/plugins/give/src/Views/Form/Templates/Classic/Classic.php on line 203
Comment
|
December 12th, 2013
The ECB’s Bridge Too Far
Frankfurt, Germany — Germany, Hessen, Frankfurt-am-Main, Euro Tower, home of European Central Bank, and Euro Symbol, Willy Brandt Platz — Image by © Walter Bibikow/JAI/Corbis
by Barry Eichengreen
Is Europe’s economic crisis mutating once again? If debt fears are now being superseded by the danger of deflation, as recent data suggest, the European Central Bank has its work cut out for it – and there is nothing to suggest that it is up to the task.
The numbers are alarming. Core inflation (the consumer price index after excluding volatile food and energy prices) in the eurozone fell to an annual rate of 0.8% in October – a 47-month low – while producer prices fell by 0.5%, suggesting that deflation is already in Europe’s economic pipeline. Annual growth of M3 money supply, meanwhile, dropped to 1.4% in October, from an already dismal 2% in September, while loans to the private sector contracted by 2.9% year on year. All of this makes it remarkable that the best the ECB could do at its December meeting was stand pat.
Continue reading…
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
Do you like the article?
We are glad you do! Please consider donating if you want to read more articles like this one.
Warning: Undefined array key "visual_appearance" in /austriancenter.com/subdomains/www/html/wp-content/plugins/give/src/Views/Form/Templates/Classic/Classic.php on line 203
Related
Comment
A Roadmap Towards the Europe We Want
November 19th, 2020
Comment
Argentina, Trump, and Perón
March 27th, 2018
Comment
Three Commencement Speeches
June 5th, 2014
Comment
“Suffonsified”
November 14th, 2013
Comment
White Knights in a Festival of Fools: The Tale of a Dangerous Encounter
April 10th, 2015