Krugman Suggests Germany Create A Bubble To Save The EuroSubmitted by Yowan on Mon, 07/30/2012 - 16:10
Paul Krugman is now suggesting that Germany needs a bubble to save the Euro. He wrote in response to the current problems in Europe:
"What could turn this dangerous situation around? The answer is fairly clear: policy makers would have to (a) do something to bring southern Europe’s borrowing costs down and (b) give Europe’s debtors the same kind of opportunity to export their way out of trouble that Germany received during the good years — that is, create a boom in Germany that mirrors the boom in southern Europe between 1999 and 2007."
So now Krugman is saying that Europe will be saved if the European Central Bank does in Germany the same thing it did in Greece, Ireland, Spain, and Portugal.
What happens when the German bubble collapses?