Joseph Stiglitz, a 73-year-old economist who is known as an outspoken critic of the economic policy pursued in the eurozone, has turned his attention to the Government of Finland. “Internal devaluations have practically never worked,” Stiglitz says, referring to the plans of the Government to slash wages in order to promote exports. “One indication of this is that almost every country has abandoned pegged currency rates.”
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“You're robbing from your children”
A decline in earned income, the Nobel Laureate explains, will gnaw away at domestic demand and create pressure for a fall in consumer prices, or deflation, thus compromising the ability of households and businesses to meet their debt obligations.