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Wednesday, October 31, 2012

 

Unemployment rise to record in Euro-Area

  With the problems suffered in Greece, the rest of the EU is suffering its fair share of problems as well.  
  We complain about the unemployment rate being around 7.8 - 8 % while other modernized nations like the EU have unemployment rates of above 11% with Spain and Ireland leading them with 25.8% in Spain and Ireland at 15.1%.  The debt crisis in Greece has pulled many of the nations of the EU into recessions and erode investor and business confidence.  Many big companies in Europe are also downsizing because of the recession creating the unemployment rate to grow.  Joseph Stieglitz, a Nobel-Prize winning economist and professor at Columbia University, said in an interview on Bloomberg Television on Oct. 30 that he’s “very pessimistic” about the prospects of a European recovery.  “Basically Europe has put in place austerity packages that almost inevitably will lead the economy to become weaker, they haven’t put in place anything that will promote economic growth,” he said. “It’s difficult to see what the impetus for real growth in Europe will be.”  Should the EU or more over the nations who have been suffering because of unemployment look to restructure how things are run in the country?  According to the Rise and Decline of Nations, I think so.  Over time, there must have been coalitions that have grown to the point where it has become inefficient and hinders progress.  So if the nations of the EU want the unemployment rate to go down then they have to figure out what is going on and fix what is happening before they fall into a deeper recession or depression.  

Resources: 

http://www.bloomberg.com/news/2012-10-31/euro-area-unemployment-climbs-to-record-inflation-slows-1-.html

Comments:
I suggest Olson's analysis is not an explanation of any given recession. Instead it is an analysis/explanation of decreases in the productivity of "an economy" over time. There can be expansions and recessions which are explained with a different analysis.
 
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