By Paul Krugman, Krugman & Co. | Op-Ed
Counterpunch - Thursday, 06 June 2013
Ken Rogoff, the Harvard economist whose work with Carmen Reinhart has
played a central role in the debate about austerity policies, recently
wrote a syndicated column that is structured as an argument against
Those Who: those who believe that Europe's problems result solely from
excessive austerity, and would all be solved with a bit of Keynesianism.
It might help if he would name names, otherwise people might imagine
that he's talking about, say, the economist Martin Wolf or me. But he
can't be, can he? Because neither of us — nor, for that matter, anyone
else I can think of — is making that argument.
Everyone with a bit of sense has argued all along that Europe has a
big problem resulting from its single currency: Countries on the
periphery of the euro zone experienced a sharp rise in relative costs
and prices during the boom years, and the process of correcting that
overvaluation through "internal devaluation" has been extremely
difficult and painful.
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