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Yesterday the European Central Bank announced a new round of loans, an admission that things aren’t going well in the eurozone, in particular in Italy. Happily, this week we had already recorded an at-times contentious Alphachat podcast with Ashoka Mody of Princeton and Waltraud Schelkle of the LSE. The subject: Italy, but more broadly, whether the eurozone could ever possibly come up with a policy that works for both Italy and Germany.
That is: is the eurozone inherently flawed? Or is it fixable? The discussion wandered into the American Civil War, with its ever-closer union and the creation of the greenback, the first federal dollar. But mostly, we talked about that great economic euphemism, "productivity" — whether you can pay workers less by forcing pay cuts on them, or whether you need a currency devaluation to make their labor less expensive.
Take a listen.
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