The ECB, structural reforms and a long run misconception (graph)

“In the long run we are all dead” or with a Golden Dawn government

Real-World Economics Review Blog

The most famous Keynes quote is no doubt:

But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.”.

But ECB economists clearly do not grasp the wisdom of these words. I was reading the recent ECB document: “Progress with structural reforms across the Euro Area and their possible impacts“. I’ll write more about this. For now:  after seven years of continuous decline and/or deflation of the Greek economy and an about 25% contraction the ECB economists dare to state (based upon a 2013 IMF report):

A number of structural reforms were implemented in Greece. The IMF estimates that policies which close roughly half the gap in product…

View original post 164 more words

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