AEI's Makin: As Greece Leaves, What Happens to the World's Economy?

In the latest economic outlook, American Enterprise Institute (AEI) economist John Makin examines the euro endgame.

Makin explains that austerity policies and bank deleveraging in exchange for loans has resulted in a predictable recession with plummeting employment, incomes, and prices.

With Greece’s imminent departure from the eurozone, what will happen to Germany and the rest of Europe?

Makin explains that:

  • German deflationary policies are inflicting economic pain throughout Europe—most notably in Southern Europe—and the resulting leftist political backlash has put the euro in danger.
  •  
  • Greece’s probable exit from the eurozone will have a contagious effect on the rest of Europe, as well as the world economy.
  •  
  • If Germany refuses to lead Europe toward fiscal union and to accept higher inflation, the results could be a fragmented eurozone, a collapsed European financial system, and a deflationary shock in Germany.
  •  

John Makin is a former consultant to the US Treasury Department, the Congressional Budget Office, and the International Monetary Fund. He is available for interviews and can be reached at [email protected] or through his research assistant [email protected]

CHARTS: The economic suffering in Southern Europe and Ireland is clearly demonstrated in the extraordinary rise in overall unemployment  and youth unemployment rates in Europe since 2008 as seen in the charts below.

The economic suffering in Southern Europe and Ireland is clearly demonstrated in the extraordinary rise in overall unemployment  and youth unemployment rates in Europe since 2008 as seen in the charts below.

View the larger overall unemployment or youth unemployment chart.

For help reaching any AEI scholar and for all other media requests, please contact Jesse Blumenthal at [email protected] (202.862.4870).

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

John H.
Makin

What's new on AEI

To secure southern border, US must lead international effort to stabilize Central America
image The Ryan pro-work, anti-poverty plan: Thomas Aquinas 1, Ayn Rand 0
image Does SNAP support work? Yes and no
image Obama Democrats lose their big bet on health exchanges
AEI on Facebook
Events Calendar
  • 28
    MON
  • 29
    TUE
  • 30
    WED
  • 31
    THU
  • 01
    FRI
Tuesday, July 29, 2014 | 10:00 a.m. – 12:00 p.m.
Is Medicare’s future secure? The 2014 Trustees Report

Please join AEI as the chief actuary for Medicare summarizes the report’s results, followed by a panel discussion of what those spending trends are likely to mean for seniors, taxpayers, the health industry, and federal policy.

Friday, August 01, 2014 | 10:30 a.m. – 12:00 p.m.
Watergate revisited: The reforms and the reality, 40 years later

Please join us as four of Washington’s most distinguished political observers will revisit the Watergate hearings and discuss reforms that followed.

No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.