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The Upside of Europe’s Ebbing Inflation

Wall Street Journal Original article ›

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Michael Heise, chief economist of Allianz SE, says the ECB needs to assure financial markets that the deflation risks in the first half of 2015 are not all negative, as the declining price of oil adds to purchasing power in the eurozone economies. He points out that ECB needs to define price stability not as inflation of "nearly 2%" but as inflation of "below 2%," to take into account the impact of declining oil prices on inflation. His concern is about financial markets expecting strong quantitative easing program from the ECB in 2015.

Higher German inflation as a way to improve the competitiveness of other eurozone countries in 2012-2015

09/25/2011

Higher German inflation would provide a safety valve in the absence of the ability of countries in the eurozone to devalue their currencies to improve competitiveness.

Grouped Articles

Euro Zone Death Trip

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Euro-Zone Inflation Returns to Record Low

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Euro Zone Edges Closer to Deflation

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Ultralow Inflation Hits Europe in Different Ways, Complicating Fix

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The Upside of Europe’s Ebbing Inflation

Wall Street Journal 12/03/2014

The ECB and inflation in the eurozone

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Grouped Articles

Euro Zone Edges Closer to Deflation

Wall Street Journal 03/29/2014

E.C.B. Plots Strategy for Staving Off Deflation

New York Times 05/26/2014

Eurozone Inflation Continues Its Slide

New York Times 07/31/2014

Eurozone’s Drop in Inflation Carries More Fears of Another Recession

New York Times 09/30/2014

Eurozone’s Drop in Inflation Carries More Fears of Another Recession

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Ultralow Inflation Hits Europe in Different Ways, Complicating Fix

Wall Street Journal 11/05/2014

How Mario Draghi, ECB president, sees the problems in the eurozone and policy direction in 2012-2015

01/11/2010

A wide ranging interview with Mario Draghi by Wall Street Journal reporters Blackstone, Karnitschnig and Thomson, which gives insights on how Draghi sees solutions to the crisis in the eurozone and future policy. Draghi favors good fiscal consolidation which combines freeing up labor markets and structural changes for Italy, Spain and other southern countries, with spending reductions, and capital investment in the future as opposed to tax increases for current spending and lack of capital investment for future growth. He points out that with excessive debt to GDP ratios there is no alternative to this right kind of fiscal consolidation. The fiscal consolidation gives the structural changes time to be put in place..

Grouped Articles

ECB Moves Markets, Not Economy

Wall Street Journal 05/03/2013

The Man Who’ll Do Triage on Europe’s Banks

New York Times 10/20/2013

ECB Struggles With Low-Altitude Flying

Wall Street Journal 11/10/2013

Euro Strengthens as Fears Fade

Wall Street Journal 01/12/2013

Bonds of Italy, Spain Narrow Gap With U.S., German Yields

Wall Street Journal 04/09/2014

E.C.B. Plots Strategy for Staving Off Deflation

New York Times 05/26/2014


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