15 February 2015

Paul Krugman: Punished for Playing by the Rules


Ambrose Evans-Pritchard, the international business editor at The Telegraph, recently wrote that Europe's slide toward deflation amounts to a "betrayal" of Southern Europe. This sounds over the top, but it is the simple truth. So let me elaborate with a picture I find illuminating.

The chart here shows core inflation (which excludes energy, food, alcohol and tobacco) in Germany, Spain and the euro area as a whole.

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