All economists in Europe seem worried about deflation. This deflation looks like a big black monster that will kill our economy and as such is to be fought. When I took my basic econonomy course at school, I understood that price lowering is one of the two faces of the basic economy law. Prices are or should be reguated by this law and are the point where demand and offer meet. If we look at the situation in Italy, prices have been rising with no apparent reason since the introduction of the Euro, while salaries have not grown accordingly. The middle class has seen its money available for spending reducing year by year, and therefore the economy have started to shrink. If we want to restart the economy in Italy there are only two options: rise the salaries or lower the prices. The first option requires too many conditions to happen, whilst the second is simply consequence of the free market. Economists (and politicians) shold just let the market have its natural evolution, and stop spoiling it with their policies. The last 10 years should teach us how the economic theories not always work as expected in the real world.
No comments:
Post a Comment