Question for Econo-types

Dennis Robert Redmond dredmond at efn.org
Thu Jan 3 16:02:54 PST 2002


On Wed, 2 Jan 2002, pms wrote:


> But anyway, my question, if someone would be so kind: With soft pricing in
> manufactured goods and all, why is EU worried about inflation? Is it
> because they provide services like healthcare which are heading into
> hyper-inflation? And because their people have unions? Or is it some other
> kinda thing?

The EU spends less on healthcare than the US, and does a much better job of pressuring drug firms to lower prices, so there's much less of an inflationary push there. In practice, the ECB has been pro-inflationary, of all things; despite its neolib rhetoric, the Eurobankers have kept real rates below inflation plus GDP growth, a big difference from the early 1990s recession.

-- Dennis



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