Marco Buti, Björn Döhring and José Leandro, (2018), “Increasingly fit again: The euro area economy is shedding the crisis legacies”, VoxEU, 8 February
The outlook for the euro area economy depends to a large extent on whether the impact of the crisis will turn out to be permanent or transitory. This column attempts to chart out the path ahead, starting from what different narratives of the ‘atypical recovery’ imply about the further trajectory of GDP and inflation. In view of remaining slack, and barring an exogenous shock or policy mistakes, there is scope for solid GDP growth above potential for some time. The factors that should eventually drive an increase in core inflation are gaining force, but only gradually. The current supportive policy mix is thus appropriate for the euro area as a whole, but reforms that raise productivity and increase the economy’s resilience to shocks should be accelerated.
Relevant Posts
- Paolo Manasse, Dimitris Katsikas, (2018), «Economic crisis and structural reforms in Southern Europe: Policy lessons», Vox, 1 February
- ECB, (2017), «Structural reform needs in the euro area: insights from a survey of large companies», Economic Bulletin Issue 66, September 2017