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I think insufficiently large budget surpluses in the growth phase are a bad thing. The GSP justified complacency on that front.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Fri Feb 12th, 2010 at 03:13:30 PM EST
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the GSP was not sufficiently strict?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Feb 12th, 2010 at 03:36:05 PM EST
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The GSP was too strict in the recession and insufficiently strict in the expansion.

But this is because it failed to properly allow for the business cycle. It is predicated on the assumption that the downward part of the cycle is an outlier.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Fri Feb 12th, 2010 at 03:45:58 PM EST
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