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Martin Feldstein on how a decline in the value of the euro would help reduce the current account and trade deficits of troubled eurozone countries
06/28/2012
Feldstein says a decline in the value of the euro would reduce imports and increase exports of troubled eurozone countries in relation to non-euro countries. This would help the economic recovery in these countries. A slower rate of wage growth in these countries and higher wage growth in Germany would help improve their competitiveness with Germany over time. These actions in addition to reforms and restructuring to improve labor competitiveness would help these countries return to growth.
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