Mr Cowen’s posts, and many others like them by other authors, sometimes look like elaborate efforts to avoid concluding that German inflation-phobia, while totally understandable and rational, looks like a grave moral error in the current economic environment. Obviously the periphery has huge problems that will not go away given more monetary expansion and higher inflation in Germany, and obviously it is not Germany’s fault that they have made x, y, and z good economic decisions while the periphery has taken q, r, and s bad ones. For all that, it is still the case that higher inflation in Germany would alleviate substantial suffering around the periphery at fairly minimal cost to Germans (for their suffering, as we’ve seen, they get more holidays in Portugal and a nice Mediterranean real estate portfolio). Many Germans might prefer not to accept that trade-off, such as it is. Voters of any other nationality might well make the same choice if put in that situation. But that doesn’t make it the right choice. Not by a long shot.
Si inca ceva: de ce Germania dicteaza singura politica monetara a ECB?