I think it has something to do with oil shocks and inflation, but if you could please explain it would be greatly appreciated. Kind regards Col
2007-01-03 20:47:10 · 2 answers · asked by coolcoling 1 in Social Science ➔ Economics
It does have a little bit to do with inflation, but not in the manner you're thinking.
When different countries adopt a single currency, they can no longer use monetary policy as a way to help their economy. This is troublesome to some nations because monetary policy is normally the most effecient way to accomplish this.
Pretend that Poland is suffering high inflation, but France is experience downward pressure on prices.
What is a beneficial policy for Poland is hurtful for France. Which policy, then, should the bank pursue?
The US occasionally has similar problems due to differences in industrial, financial, and agricultural regions of the country. However, this is nearly entirely offset because labor is freely mobile between regions.....this is not entirely the case in Europe.
2007-01-04 02:26:41 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Simple reasons why you and me differs for level of stability in the scale. So is the Nations.
2007-01-04 00:24:25 · answer #2 · answered by wacky_racer 5 · 0⤊ 0⤋