Report
Patrick Artus

What are the resulting effects (spillovers) of the economic policies that Germany could implement on the other euro-zone countries?

The German economy is becoming very weak as a result of the major problems in traditional industry. We seek to identify the effects of the economic policies that Germany could implement on the other euro-zone countries: An expansionary fiscal policy in Germany may have a negative impact on the other countries if this policy primarily benefits economic agents residing in Germany and if it leads to a rise in interest rates caused by a less expansionary monetary policy by the ECB; A policy of driving down unit wage costs (reduction in wages and in companies’ social contributions) is obviously non-cooperative, as its goal is to take market shares from other countries. So it is possible that the weakness of Germany's economy will have a negative impact on the other euro-zone countries , not only directly , but also because the resulting effects (spillovers) of Germany's economic policy reaction on the other countries are negative for these other countries.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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