Revised Deflation Grave Summary

Original version:


Summary of “Europe already has one foot in ‘Japanese’ deflation grave”

 Ambros Evans-Pritchard, in the Telegraph of October 23, 2013 explains why a policy error in Europe could soon cause a deflation crisis.

Recently inflation in the euro zone has dropped to 0.9 pc with no signs of turning into an upwards trend anytime soon. That is putting the euro zone on the edge of a deflation crisis. According to Evans-Pritchard, a deflation would become absolutely disastrous once a country’s debt surpasses 300pc of GDP. For Countries like Italy or Spain deflation would mean a “runaway debt” situation.

Evans-Pritchard believes the ECB should be doing everything to ensure the inflation does not fall below 2pc. Instead, due to a strong bias towards Germany, the ECB is sitting on its hands, waiting for the global economy to grow again and lift the European economy up. Ironically Germany, fundamentally voting against inflation, is on the edge of deflation itself. According to Evans-Pritchard that offers the perfect opportunity for the “Club Med allies” to unify and use their authority and persuade the ECB to change its policy. If nothing changes Evans-Pritchard fears Europe will follow into Japans footsteps. All it needs is one nasty surprise and Europe will have its very own deflation crisis.

Revised version:
Summary of “Europe already has one foot in ‘Japanese’ deflation grave”

Ambrose Evans-Pritchard, in the Telegraph of October 23, 2013 explains why a policy error in Europe could soon cause a deflation crisis.

Recently inflation in the euro zone has dropped to 0.9 pc with no signs of turning into an upwards trend anytime soon. According to Evans-Pritchard, deflation would becomes absolutely disastrous once a country’s debt surpasses 300pc of GDP. For countries like Italy or Spain deflation would result in “runaway debt”.

Evans-Pritchard believes the ECB should be doing everything to ensure inflation does not fall below 2pc. Instead, due to a strong bias towards Germany, the ECB is sitting on its hands, waiting for the global economy to grow again and lift the European economy up. Ironically Germany, fundamentally voting against inflation, is on the edge of deflation itself. According to Evans-Pritchard that offers the perfect opportunity for the “Club Med allies” to unify and use their authority and persuade the ECB to change its policy. If nothing changes Evans-Pritchard fears Europe will follow into Japans’ footsteps. Only one surprise could act as a catalyst and Europe will have its very own deflation crisis.

Writing an Academic Paper...

Writing an academic paper, I noticed that 1000 words are far less than they sound.

Writing an academic paper, I realized how difficult it is to focus on one topic and not get to far from it while writing.

Writing an academic paper, I found out how crucial it is to always write down where you've read what.

Writing an academic paper, I discovered the world wide web to be my enemy, with all it's unreliable sources which would contain sooooo much unreliable information.

This is just a short list of problems I so far had to face so far. However, most difficult for me has been to figure out what exactly my topic is about, and how to structure the paper, so I would not be tempted to run riot. My biggest problem is not that I am not interested in my topic, but the exact opposite: I am way too interested. Reading more and more about it just makes me want to extend my paper endlessly. It is really hard for me to figure out what information to I have to include in my academic paper and what is dispensable. Yet, I have not found the perfect way to get rid of this obstacle. What I did do, is writing a concept like we have to do for our first Proseminar Paper. I already have the headings for all the parts in my paper and i have assigned my sources to these headings. Now I am carefully reading through the sources and writing down important information with all the details about where I found them. The next step, and hopefully the easiest one, will be to sum all this information into nice paragraphs. The last step will be to put all the nice paragraphs together in order to have them form a well structured and perfectly written academic paper.