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The periphery countries had wage inflation much faster than productivity growth, which taken together with the fixed exchange rate of the euro, is what got us here in the first place.

Um, what got us here in the first place was that the periphery financed its consumption though lending from the core. There was a massive private debt and asset price bubble, not a gross increase in profits and wages in the periphery. And a lot of inflation, with all this debt and asset price money slushing around.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 12:09:00 PM EST
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