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Foreign primary deficit plus prevailing hard currency interest rates being in excess of sustainable nominal growth rates.

You can solve this with a transfer union, by Germany import more to reduce the foreign primary deficit or by increasing Eurozone inflation to boost nominal growth, while retaining low Euro-denominated interest rates. But you need at least one of those.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 16th, 2011 at 03:29:32 PM EST
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