Germany Versus the ECB
With the German economy close to recession, European Central Bank President Mario Draghi has rightly urged eurozone governments to provide more fiscal stimulus. And acknowledging the interaction between fiscal and monetary policy would leave critics much less room for ECB-bashing.
CAMBRIDGE – Over the past couple of months, the German debate over fiscal and monetary policy has taken an interesting turn. Old, deeply ingrained economic dogmas, including that the public sector must strive to generate a fiscal surplus regardless of macroeconomic conditions, are being reappraised, at least by some.