Discussion #1- Macro – Essay Example
The Article d “Unemployment and Inflation Rise in Euro Zone” has been written by David Jolly and published in The New York Times on March . This article discusses about the rising inflation and unemployment in Euro area since the introduction of the common currency in the region. The data presented in the article suggest that the overall unemployment level rose to 10.7% during January 2012 in 17 of the EU nations since the introduction of euro. Unemployment rate in all of the 27 member states however, remained at 10.1% showing an increase of 0.1% as compared to December 2011 data. The article also discusses about rising inflation and expansionary monetary policy tools adapted by central banks of the region. Data presented however, suggest that manufacturing sector is picking up which may translate into more employment in short run. (Jolly)
Euro zone is going through sovereign debt crisis with countries like Greece and Italy are facing difficulties in paying off their obligations on time. Due to higher debt levels, most of the countries in the region have taken austerity measures thus focusing on fiscal contraction policies. What is however important to note that the labor market data is diverse in nature with countries like Austria and Netherland showing low unemployment rates whereas countries like Spain and Greece showing higher unemployment rates.
The overall unemployment situation within these countries may be a direct result of fiscal policies adapted by the respective governments in order to control their expenditure on to reduce budget deficit.
Jolly, David. Unemployment and Inflation Rise in Euro Zone. 1 March 2012. 04 March 2012 .