(106927327) The Euro Debt Crisis and Germany’s Euro Trilemma

8/13/2019 (106927327) The Euro Debt Crisis and Germanys Euro Trilemma

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Working Paper No. 721

The Euro Debt Crisis and

Germanys Euro Trilemma

by

Jrg Bibow

Levy

Economics

Institute ofBard College

May 2012


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B!T"CT

This paper investigates the causes behind the euro debt crisis particularly ;ermany but rather a ?t6in@ banking

and balance of payments crisis. Intraarea competitiveness and current account imbalances and

the corresponding debt flo6s that such imbalances give rise to are at the heart of the matter and

they ultimately go back to competitive 6age deflation on ;ermany independent central bank. isdiagnosis and the 6rongly prescribed

medication of austerity have made the situation 6orse by adding a gro6th crisis to the potpourri

of internal stresses that threaten the euro threat and presents a moral ha%ard of perhaps unprecedented scale to the global

community.

#eywords$ Euro onetary 'nion Banking Crisis BalanceofPayments Crisis (overeign

Debt Crisis Competitiveness Imbalances iscal Transfers Bailouts -usterity

JE% Classi&i'ations$ E32 E+2 E+# E$+ 9$ ;,!

9


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1( )*T"+D,CT)+*

This paper investigates the causes behind the euro debt crisis particularly ;ermany and that policy prescriptions

derived from this popular misdiagnosis 6ill make the situation only 6orseAa ?t6in@ banking

and balance of payments crisis. Intraarea competitiveness and current account imbalances and

the corresponding debt flo6s such imbalances give rise to are at the heart of the matter and they

ultimately go back to competitive 6age deflation on ;ermany independent central bank.

(tarting 6ith a comparative analysis of the budgetary and e*ternal position of Euroland

in global perspective in section 2 section 9 highlights that intraarea imbalances rather than

Euroland eventually reemerged as Euroland


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2( E,"+%*D )* G%+B% -E"!-ECT).E

rom looking at the area


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Debt ?to;DP@ ratios sho6 a similar global constellation. While starting from a

some6hat higher level of around 8+ percent the rise in Euroland


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0or does a comparison of current account positions suggest any special vulnerability in

the case of Euroland. While stagnant Hapan is notorious for running a large current account

surplus position both the 'G and especially the '( had large deficit positions prior to the global

crisis. These have shrunk since then ?'(@ or may even be on the verge of disappearing today

?'G@. By contrast Euroland

surrounded by precarious global currents. In particular the Euroland authorities never tired of

6arning of the heightened risks posed by irresponsibly large =global ?current account@

imbalances> a malign un6inding of 6hich they had feared Euroland might become a victim of

despite Euroland European 'nion ?E'@ Commissioner for Economic and onetary -ffairs

Hoa&un -lmunia ?2,,#@ blissfully declared in the fore6ord to the official = E'J!,> success

story volume4

- full decade after EuropeKs leaders took the decision to launch the euro 6e havegood reason to be proud of our single currency. The Economic and onetary

'nion E'M and the euro are a maFor success. or its member countries E'

has anchored macroeconomic stability and increased cross border trade financial

integration and investment. or the E' as a 6hole the euro is a keystone offurther economic integration and a potent symbol of our gro6ing political unity.

-nd for the 6orld the euro is a maFor ne6 pillar in the international monetary

system and a pole of stability for the global economy. -s the euro area enlarges in

the coming years its benefits 6ill increasingly spread to the ne6 E' membersthat Foined in 2,,3 and 2,,8.

While the grand =island of stability> illusion 6as to unravel shortly even by the spring of 2,!2

the Euroland authorities are still playing catchup 6ith events. When &uite uncharacteristically

the International onetary und urged its members to set stimulus plans in early 2,,# the

8
mailto:EMU@10mailto:EMU@10


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Euroland authorities responded that they 6ould have none of that arguing that it 6ould harm the

#


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credibility of the (tability and ;ro6th Pact.! The core of Europe had entered recession in the

spring of 2,,# but the authorities remained in complete denial until the fall. Even the Lehman

failure at first failed to a6ake them from their muchcherished dream that stabilityoriented

policies had kept the Euroland house in order so that any storm 6ould soon be past.

Commenting on '( rescue measures initiated in response to the Lehman failure ;erman finance

minister Peer (teinbrNck declared in late (eptember 2,,# that =this crisis originated in the '(

and is mainly hitting the '( ... In Europe and ;ermany such a package 6ould beM neither

sensible nor necessary.>2

(tarting in )ctober 2,,# Euroland agreed to participate in globally coordinated stimulus

measures designed to counter the global crisis albeit never more than halfheartedly as this 6as

against their conviction. (o 6hen the 6orld economy had barely turned the corner and 6hile the

situation in Euroland in particular 6as still especially precarious the Euroland authoritiesAunder ;erman leadershipAbegan to pester their ;2, partners to start shifting policy focus a6ay

from stimulus and to6ard austerity.9 -ll along the Euroland authorities maintained their self

righteous vie6 that Euroland had been hit as an innocent bystander by an e*ternal crisis that it

had shared no responsibility in provoking and that the rest of the 6orld 6ould be 6elladvised to

follo6 Euroland


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arrest made it clear that European banks had behaved especially recklessly in their gambling in

foreign lands namely by tolerating a huge short dollar position that even the ECB as their home

lender of last resort 6ould be unable to look after ?at least 6ithout the cooperation of the '(

ederal Oeserve met through currency s6ap arrangements bet6een the central banks in due

courseAsee Baba cCauley and Oamas6amy 2,," cCauley and von Peter 2,," c;uire

and von Peter 2,," Borio and Disyatat 2,!!@.

Oeckless global adventures of European banks and the buildup of corresponding global

e*posures meant that Europe 6as about to have a maFor banking crisis on hand. In this 6ay the

'( =subprime mortgage crisis> as it 6as initially called 6as not much of an =e*ternal> shock at

all but an internal credit shock from the beginning. -las on top of stress due to foreign

e*posures property market bubbles closer to home started bursting very much in tandem 6ith

events across the -tlantic. In this regard the ECB that 6as going to re&uire

a lot of =mopping up> at the home front too ?much to the disappointment of ECB propaganda on

this countAsee ECB 2,,+ and Bibo6 2,,+ for instance@.

Together these events Aand the unfolding banking crisis they heraldedA6ere going to

undermine the continuation of lush intraarea capital flo6s that severely unbalanced demand

gro6th in Euroland had come to depend upon. -s 6ill be developed in detail belo6 Europe (tarting in late 2,," events in ;reece a

mere fortieth part of the Euroland economy came to epitomi%e the evil po6ers of fiscal

profligacy and 6ere &uickly identified as the alleged root cause of all euro troubles.3 Debunking

this ne6 myth 6ill re&uire taking a closer look inside Euroland.

3 Earlier in 2,," 6ell before ;reece moved into the spotlight market stress follo6ing a series of rating do6ngrades

of Ireland had prompted ;ermany


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difficulty> ?Benoit 2,,"@.

!!


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/( %++# )*!)DE E,"+%*D$ )%%,!)+* + !TB)%)T *D *+T M,C3

,*)T T %%

The aastricht regime of E' is designed for stabilityAto satisfy and e*port ;erman =stability

culture.> (tability is believed to come about through the ECB paired 6ith =sound> public

finances that is budget deficits belo6 9 percent ?and balanced or in surplus over the course of

the cycle as prescribed by the socalled =(tability and ;ro6th Pact>A(;P@. When Euroland

became home of acute debt market disruptions in 2,!, ECB representatives 6ere &uick to point

out that independent central bankers had dutifully delivered on their part of the deal4 6ith an

average inflation rate of !."" percent bet6een !""" and 2,!! the masters of Europe


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In particular for long fudging its budgetary numbers ;reece had run budget deficits that

6ere persistently above the 9 percent mark both before and since Foining Euroland. When a ne6

incoming government brought this matter to daylight in the fall of 2,," yields on ;reek

government bonds surged effectively shutting off the ;reek government clause of the

aastricht Treaty and the later (;P 6ere seemingly verified in 2,!, as the =sovereign debt

crisis> spread across Euroland and beyond.

- number of observations are in order here about the rather diverse budgetary situation

that has characteri%ed Euroland both prior to and since the global crisis of 2,,#". irst ;reece

clearly is an outlier. While other member


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6hich 6as recovered by !"""@ that restored the country


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I observed above that the fiscally vituous E' members also share another common

feature4 current account surplus positions. While Euroland


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economies an e*ternal sector needs to be added to the set of accounts and sectoral balances as

captured by the balance of payments on current account. By logical necessity any particular

country can only succeed in running a public sector surplus if either its o6n private sector and5or

the foreign sector =overspend.>

In the Euroland conte*t (pain and Ireland provide e*amples of the former propelled by

property market booms that not only allo6ed for national public sector budget surpluses but for

current account deficits on top of that 6ith private sector bubble hangovers today being all the

6orse for that. ;ermany -ustria inland and the 0etherlands provide e*amples of the latter4

countries that relied on current account surpluses to help consolidate their o6n public finances.

Being at 6ar 6ith doubleentry bookeeping these countries may even convince themselves of

their o6n virtuousness but their success 6as actually only made possible by others -s to the aim of the (;P e*cept by courtesy of the rest of the 6orld Euroland as a

6hole can actually only achieve a balanced public sector position if its private sector stops

saving in the aggregate.

These remarks should not only 6arn us of Euroland ore generally an

e*clusive focus on public sector deficits only also runs the risk of seriously misdiagnosing

private sector debt fragilities.

or at the heart of today


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4( +")G)*! + D).E"GE*CE! *D B,)%D,- + )*T"5"E )MB%*CE!

Current account imbalances can arise for a number of reasons. The follo6ing t6o 6ere the most

relevant in the Euroland conte*t4 first competitiveness positions running out of kilter and

second divergent domestic demand gro6th rates. Closely intert6ined these t6o influences

actually reinforced each other o6ing to the 6orking of the aastricht regime.

In general the evolution of competitiveness at the national level is mainly shaped by t6o

factors4 first the rate of increase in 6ages ?and other costs@ relative to the rate of productivity

gro6th and second the e*change rate. -s Euroland has eliminated the e*change rate factor

completing the longterm %eal of getting rid of the risk of beggarthyneighbor policies through

competitive e*change rate devaluation only the former factor remains relevantAattaining

paramount importance in maintaining internal balanceQ

Geynes had identified aggregate 6age trends interacting 6ith national monetary policies

as shaping countries< competitiveness and net e*port performance in The General Theory. The

!8


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vital importance ofArelativeAnational 6age and productivity trends inside a monetary union

can be most easily understood in terms of undell and the euro provided the =coronation> in handling this very threat.

'nfortunately the issue then someho6 fell through the cracks probably o6ing to Europe

indeed.-s a rule if 6ages and productivity gro6 at the same rate =unitlabor costs> stay steady

and so 6ould e*ternal competitiveness of countries that have the same gro6th rate in unitlabor

costs ?assuming that profit margins and indirect ta*es etc. remain unchanged too@. -s unitlabor

costs are the foremost determinant of inflation ?beyond the very short run of any temporary

influences@ the target for the rate of inflation chosen by the authorities for any particular country

?or group of countries@ thereby also provides thestandard or norm for the gro6th rate of nominal

unit labor costs. Essentially a monetary union is a commitment to a common inflation rate.

!#


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Europe


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;erman productivity gro6th since !""# 6as no more than average similar to that of rance and

Portugal 6ell belo6 that of ;reece and Ireland as the outperformers 6hile Italy and (pain stand

out as the productivity gro6th laggards.

With 6age repression as the true cause of ;ermany


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0ot ;ermany but rance most loyally stuck to the E' commitment to a common 2

percent inflation rate throughout the euro era. )f the other partners Italy erred some6hat in the

up6ard direction and even more so (pain and the smaller of the PII;( countries. )n the otherhand of the smaller current account surplus countries -ustriaAand to a small e*tent inland

tooAstayed persistently belo6 the stability norm. But of all partner countries it is ;ermanyA

the old stability anchor of the E*change Oate echanism of the European onetary (ystemA

6ho stands out as the true outlier of the 6hole pack.

There can be no serious doubt that ;ermany


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6( "E7#E*)*G + T3E 8!)C# M* + T3E E,"+9$ 8MDE )* GE"M*9

EC+*+M)C M)"C%E

In the spring of !""# ;ermany barely met the 9percent deficit hurdle that by the rules of the

aastricht Treaty 6as so critical in getting the euro off the ground by !""". (tarting from a

balanced budget in !"#" the initial budgetary impact of ;erman unificationA6hich essentially

bankrupted much of the East ;erman economy over nightA6as a deficit of 2.# percent in !""!.

)6ing to the authorities< thoroughly illguided macroeconomic policy response to the

unification challenge the West ;erman economy too ?and much of the rest of Europe@ 6as then

recklessly pushed into recession in !""2"9 ?Bibo6 2,,9@.

The labor market and budgetary conse&uences of the latter policy mistake 6ere to shape

the country


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This uncomplimentary title 6as besto6ed upon ;ermany for good reason. It 6as not only

a reflection of the fact that the country thanks to

unconditional austerity and 6age restraint e*ports 6ere ;ermany ECB stance for Euroland far too easy for the periphery 6here bubbles 6ere

nourished as a result.

0ote then ho6 the aastricht regime actually amplified the asymmetric shock that arose

as Euroland failed to ensure common 6age bargaining. In essence once ;ermany


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became relatively tighter for ;ermany than in countries 6ith higher 6age and price inflation

2+


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dampening credit gro6th and asset prices in line 6ith 6age deflation. urther head6inds arose as

the stagnant economy triggered a budgetary s&uee%e in compliance 6ith the (;P as the deficit

ratio e*ceeded 9 percent bet6een 2,,2 and 2,,+. Countries 6ith higher national 6age trends

6ould e*perience the opposite kind of regimeinherent forces at 6ork even more so as stronger

gro6th performances makes 6ages diverge from the norm in the up6ard direction.+

While balancing Euroland


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Brussels at 6hich European Commission and ECB representatives 6ere present. (ee Bibo6 ?2,,$b 2,,8a@.

28


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- look at the compositionbydestination of ;ermany


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(uffice to mention that 6hile merchandise trade surpluses dominate ;ermany


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While the European crisis is hurting ;ermany through direct regionallyconcentrated e*port

e*posures the crisis is also benefiting the country in t6o important 6ays4 first by depressing the

euro and hence stimulating noneuro net e*ports and second by depressing ;erman interestratesAo6ing to the market convention of ;ermany as a safe haven. While the latter channel has

contributed to more balanced gro6th of the ;erman economy than ever seen in the last decade

6ith net e*ports contributing =only> a third of ;DP gro6th since 2,!, ignoring ;ermany


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crisis countries. These countries might have borro6ed from thirdparty ?either member or

nonmember@ countries 6hile ;ermany might have invested in '( Treasuries for instance.

/o6ever 6hile gross capital flo6s have gro6n sharply globally and national balance sheets

thus become more intert6ined in the process across the globe the degree of global financial

integration is actually regionally concentrated and especially advanced 6ithin Euroland.

Discussing the developments and structure of ;ermany


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?2,,#4 !#@ also observed4 =The banking sector plays a central role in ;ermany as compiled by the Bank for

International (ettlements ?and related analyses such as -vdFiev 'pper and Vause 2,!,@ and an

I study of =European financial linkages> ?Waysand et al. 2,!,@ constructing and analy%ing a

ne6 database comprising bilateral e*ternal financial assets and liabilities confirm that ;ermany


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crisis countries ?(pain Ireland and Italy@ or through indirect debt e*posures via rance and the

'nited Gingdom ?and to a lesser e*tent Lu*embourg@ it is 6orth6hile to highlight that these

risks get crystalli%ed in peculiar 6ays inside Europe


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By linking 6holesale payment systems and money markets across Euroland T-O;ET2

is a core part of the technical infrastructure underpinning the euro providing for final settlement

on the Eurosystem


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among the ;erman media and general public. While (inn ?2,!!ab@ recommends placing tight

national caps on T-O;ET2 balances and re&uiring annual settlements of balances among

member central banks by transfer of gold or foreign e*change reserves the Bundesbank is

directing its criti&ue at the ECB ?LTO)@ of December

2,!! and ebruary 2,!2 since =nMeither providing life support to ailing banks nor propping up

the solvency of sovereigns falls under the remit of monetary policy> ?Weidmann 2,!2b see also

Wilson 2,!2@. Both kinds of criti&ues or proposals are much beside the point.

It is obviously true that T-O;ET2 balances could not arise 6ithout Eurosystem lending

?see Bindseil and Gnig 2,!!@. It does not follo6 that restricting either T-O;ET2 balances or

Eurosystem lending if 6orkable at all 6ould make resolving the euro debt crisis any more

likely. -t issue is a t6in banking and balance of payments crisis the underlying causes of 6hich

6ere analy%ed above. It is one thing that going for6ard continued competitiveness and current

account imbalances presuppose continued financing ?flo6s@ for as long as they persist. It is &uite

another that the debtoverhang legacies ?stocks@ accumulated up until no6 need to be rolled over

6hile regional financial integration may go into reverse and capital flight adds further vengeance

to the plight. While the socalled =bailouts> of ;reece Ireland and Portugal through the

European inancial (tability acility ?E(@ may have provided the respective sovereigns some

breathing space developments on the Eurosystem ?see Whittaker 2,!!@ or through system6ide li&uidity measures ?such as LTO)s@.

Proposals to limit the role of ECB li&uidity support and5or target balances 6ould need to e*plain

8 Contrasting the chartalist approach 6ith mainstream optimum currency area theory ;oodhart ?!""#@ had clearly

98


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identified these issues prior to the euro


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ho6 default of banks and sovereigns in crisis member countries could be avoided 6ithout it.

(uch proposals seem to be especially popular in ;ermany reflecting denial of 6hat I else6here

dubbed =;ermany

;ermany independent central bank>

?Bibo6 2,!2a@. While trade imbalances may persist for &uite some time at some point the

prospect of bankrupting the debtor countries 6ill no longer escape the markets< attentionAat

6hich time private financing 6ill suddenly stop ?or reverse@. Trade imbalances may then be

sustained by official lending but such emergency loans ?li&uidity =bailouts>@ do not solve the

underlying solvency problemAcalling for debt forgiveness ?proper fiscal bailouts@. Therefore as

a rule perpetual e*port surpluses as apparently aspired by ;ermany can only be sustained if

offset by fiscal transfers. In fact replacing lending by transfers fiscal union proper could save

and make the euro overnight.

;ermany eagerly designed the aastricht regime so as to e*clude both transfers and

bailouts of partners but ignored that running perpetual trade surpluses 6ould bankrupt its trade

partners and thus make application of the forbidden medicine inevitable. The true choice facing

;ermany is to either bail out its bankrupt E' partners or its o6n banks ?after the latter got hit

by E' partners< defaulting on their debts@.

Procrastinating on this simple choice has brought the Eurosystem into play. )f course;ermany also eagerly designed the aastricht regime so as to shield the central bank system

from public debt in order to protect its glorified independence. /o6ever given the intert6ined

fate of sovereigns and national banks in Europe


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In short ;ermany is on the hook and there is no 6ay around it.# Debt overhangs could be

more easily 6orked off if intraarea competitiveness positions 6ere restored 6ithout

undermining gro6th. -las in continued denial of the country ?i.e. e*port surpluses@.

;( ,*C+*D)T)+*% ,!TE")T *D E,"+%*D ! T3E 8!)C# M* + T3E

7+"%D EC+*+M9

)ffering his vie6s on =rebalancing Europe> Bundesbank president Weidmann ?2,!2c@ observes

that

normally e*change rate movements are an important channel through 6hich

unsustainable current account positions are correctedAeventually deficit

countries devalue 6hile surplus countries revalue their currencies. The reaction

this triggers in imports and e*ports then helps to bring the current account closerto balance.

0ote that Weidmann describes adFustment for both deficit and surplus countries as being rather

symmetric in this case. /o6ever given that e*change rate =realignment> is no longer an option

in a monetary union adFustment 6ill have to 6ork through prices 6ages employment and

output instead 6hich for Weidmann raises the &uestion4 6hich countries have to adFust /e

offers a curiously asymmetric ans6er to this &uestion4

The typical ;erman position could be described as follo6s4 the deficit countries

must adFust. They must address their structural problems. They must reduce

domestic demand. They must become more competitive and they must increasetheir e*ports. ?Weidmann 2,!2c@

/is =typical ;erman ans6er> has some rather critical implications.

What may perhaps be the market consensus vie6 suggests that 6hile deficit countries

6ill have to go through an =internal devaluation> to restore their competitiveness ;ermany

# The Bundesbank


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that sees the Bundesbank as the last man standingAas playing out in sovereign debt markets 6ith bonds.

3!


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Oest assured that the =meeting in the middle> option is not on the table. rom a ;erman

perspective this adFustment path amounts to deliberately making ;ermany less competitive

?although this 6ould be the obvious result in case of e*change rate realignment too albeit 6ith

disinflationary effects in ;ermany@. In case of internal price6age adFustments symmetry is not

tolerable to Weidmann ?2,!2c@ asking4 =ho6 can Europe succeed in this 6orld if 6e 6illingly

give up our hard6on competitiveness>" It is clear then that ;ermany intends to stay the

" Oecall here that 6age repression rather than engineering ingenuity 6ere behind ;ermany in the first place.

39


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Weidmann reveals to the 6orld community 6hat the true implications of a ;ermanled E'

really are4 supercharged mercantilism.

Containing the threat posed by the selfinflicted Euroland crisis to the global recovery

therefore has to focus on stemming euro 6eakening. indless austerity imposed continent6ide

under ;erman leadershipAfollo6ing the e*ample of ;ermany

6hich inspired the latest =strengthening> of the (;P as 6ell as the ne6 =fiscal compact>Ais

suffocating domestic demand. -s ever the E' is Fust doing =more of the

same> that is moreAallegedly confidenceboostingAausterity and structural reform

amounting to nothing but an antigro6th strategy.!, -dding a gro6th crisis to Euroland


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rom a global perspective not only is Euroland shamelessly freeloading on e*ternal

gro6th to offset suffocation of domestic demand through mindless area6ide austerity ?see

igure !"@ but adding insult to inFury Euroland is also hiFacking the I as global sponsor in

backstopping the E(5E( ?European (tability echanism@ =fire6all> for its purely

homemade internal crisis. ;erman mercantilism had given rise to regional imbalances and global

tensions in the preE' past. The euro has multiplied ;ermany global risk

=made in ;ermany> today4 arising as the potentially lethal mi* of a dysfunctional monetary

union paired 6ith the economic conse&uences of ;ermany threat and corresponding moral ha%ard

that is challenging the global community to the utmost.

;ermany


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blo6n fiscal union ?Bibo6 2,!,@. - fiscal union can take many different forms. -part from

covering the Common -gricultural Policy the current E' budget of roughly ! percent of E'

;DP allo6s for some redistribution among members to foster catchingup and cohesion. -s the

budget has to be balanced it cannot serve stabili%ation policy purposes. ;oodhart ?2,,8@ recalls

t6o reports by the European Commission e*amining the minimum re&uirements of federal fiscal

support of a common currency. While the first the socalled acDougall Oeport of !"88 argued

that a federal budget of + to 8 percent of E' ;DP 6ould be necessary the latter report of

!""9 titled =(table oney (ound inance> found that even at a much smaller annual cost of

Fust ,.2 percent of E' ;DP a stabili%ation mechanism for asymmetric shocks comparable to

6hat e*ists in the '( could be established. This minimalist =mutual insurance> version of a

fiscal union 6ould still leave it to national fiscal policies to coordinate an appropriate union6ide

fiscal stance to counter symmetric shocks.

The =no bailout> clause of the aastricht Treaty denies any role for mutual insurance

6hile the illnamed (;P has never even attempted to establish proper coordination of fiscal

stance. urther crimping members< scope for fle*ibility in dealing 6ith asymmetric shocks the

ne6ly strengthened (;P cum =fiscal compact> once again utterly fail in filling the vital E'

policy vacuum of a missing gro6th strategyA6hich must include domestic demand

managementQ

Perhaps the greatest irony of a =euro ?crisis@ made in ;ermany> is that failure to preventasymmetric shocks potentially arising from 6age divergences amounting to nothing else but

follo6ing through the original thrust of monetary cooperation in Europe directed at forestalling

competitive devaluations has much increased the re&uired scope for fiscal union in ensuring the

euro


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"EE"E*CE!

-lmunia H. 2,,#. =ore6ord.> InE!"#$%Successes and &hallenges after Ten 'ears of

Economic and onetary !nion. Brussels4 European Commission.

-vdFiev (. C. 'pper and 0. Vause. 2,!,. =/ighlights of International Banking and inancial

arket -ctivity.()S *uarterly +eie- December4 !92+.

Baba 0. O.0. cCauley and (. Oamas6amy. 2,,". ='.(. Dollar oney arket unds and

0on'.(. Banks.>()S *uarterly +eie-, arch4 $+Y#!.

Benoit B. 2,,". =;ermany Oeady to /elp Euro%one embers.>FT.com ebruary !#.

Bibo6 H. 2,,!. =aking E' Work4 (ome Lessons from the !"",s.>)nternational +eie- of

pplied Economics !+?9@4 299Y2+".

AAA. 2,,9. =)n the Sburden< of ;erman unification.>(anca /a0ionale del 1aoro *uarterly

+eie- $!?22+@4 !98Y!$". )riginally publishes as Working Paper 0o. 92#. -nnandale

on/udson 014 Levy Economics Institute of Bard College.M

AAA. 2,,3. =-ssessing the ECB Working Paper 0o. 3,". -nnandaleon/udson014 Levy Economics Institute of Bard College.

AAA. 2,,+. =Issing ails to Hustify Claims That ECB Policy lagged 'p Likely Threats.>

Letter to the EditorFinancial Times December !".

AAA. 2,,$a. =Inflation Persistence and Ta*Push Inflation in ;ermany and the Euro -rea4 -

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(106927327) The Euro Debt Crisis and Germany’s Euro Trilemma

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