European Inflation Targets. Jean-Claude Trichet is sounding hawkish about inflation again — and this is very bad news for the European periphery.
Let me offer a stylized example to explain why. So, imagine a eurozone that contains only two countries, Germany and Spain. And let’s make two assumptions: first, Germany’s economy is three times the size of Spain’s, so that German inflation is 3/4 of the overall index, Spain’s inflation 1/4; second, past events have left Spanish wages and prices 20 percent logarithmic too high relative to Germany. Mondragon Corporation. Mondragon cooperatives operate in accordance with Statement on the Co-operative Identity maintained by the International Co-operative Alliance.
History[edit] The determining factor in the creation of the Mondragon system was the arrival in 1941 of a young Catholic priest José María Arizmendiarrieta in Mondragón, a town with a population of 7,000 that had not yet recovered from the Spanish Civil War: poverty, hunger, exile and tension.[2] In 1943, Arizmendiarrieta established a technical college that became a training ground for generations of managers, engineers and skilled labour for local companies, and primarily for the co-operatives.[3] Before creating the first co-operative, Arizmendiarrieta spent a number of years educating young people about a form of humanism based on solidarity and participation, in harmony with Catholic Social Teaching, and the importance of acquiring the necessary technical knowledge.
The first 15 years were characterised by enormous dynamism. Et Tu, Wolfgang? - Paul Krugman Blog. Perhaps the most startling and frustrating thing about the debate over the fate of the euro is the way almost everyone avoids confronting the core issue — the elephant in the euro.
With a unified currency, adjustment to differential shocks requires adjustments in relative wages — and because the nations of the European periphery have gone from boom to bust, their adjustment must be downward. At this point, wages in Greece/Spain/Portugal/Latvia/Estonia etc. need to fall something like 20-30 percent relative to wages in Germany.