We show that in the EU there were diverse causes for the sovereign debt crisis. Yet, fiscal austerity was hastily imposed assuming that the multiplier would be weak and fiscal consolidation could quickly be achieved. Yet, it turned out that fiscal consolidation is state dependent: It is...

Financial Markets and the Macroeconomy A Keynesian perspective Carl Chiarella, Peter Flaschel, Reiner Franke, and Willi Semmler | 1 Routledge j j j ^ Taylor & Francis Group LONDON AND NEW YORK Contents List of figures xi ...

The economic meltdown since 2008-9 has created disinflation, and even deflation in some countries in the Euro-area, in a period with large debt overhang, creating the condition for a continuing financial market stress in the Euro-area. As disinflation and deflation push up the real interest...