The core of Greece"s trouble is too much spending, too little tax-collecting and book-cooking. Spain and Ireland are in trouble even if the percentage of their public debt in gross domestic product is much smaller than that of Germany. Italy, also in the financial markets" crosshairs, has high public debt but a lower deficit than the eurozone"s average.The root of these countries" problems is that their prices and wages have risen much faster than those of other eurozone members.There are two ways to mitigate the pain. First, to adopt temporarily more expansionary fiscal policies for a while. Or, more powerfully, the wider euro area could adopt more expansionary monetary policies for several years. As to the second option, the "inflation fundamentalists" will have none of it. This elite consisting of central bankers, top economic officials, politicians, academics and journalists insists that it is unacceptable to allow inflation to climb above two percent.Hyper-inflation in Germany in the 1930s and stagflation in industrial countries in the 1970s and 1980s support their view. It"s true that moderate inflation can creep up to become high inflation. But inflation fundamentalism can also hurt. There is little if any empirical evidence that moderate inflation hurts growth. In most countries, cutting actual wages is politically difficult if not impossible. But, to regain competitiveness and balance the books, real wage adjustments are sometimes in- evitable. A slightly higher level of inflation allows for this painful adjustment with a lower level of political conflict.On the other hand, ultra-low inflation, in a recession, can easily become deflation. Falling prices encourage people to defer spending, which makes things worse and erodes tax payments, impairing a government" s ability to pay debt. That in turn increases the debt"s size and costs.In addition, a single-minded focus on inflation makes it easy for policymakers to lose sight of the broader picture-asset prices, growth and employment. Policy can become too tight or too loose--as in the run-up to the crisis in the U.S. when low inflation was seen as a comforting sign that things were in order.In a recession, ultra-low inflation also reduces the effectiveness of monetary policy since interest rates cannot go below zero. The crisis in the euro area highlights the need for a more openminded discussion of the merits and costs of ultra-low inflation.
A．cutting the spendingB．controlling inflation within two percentC．ultra-low inflationD．moderate inflation
点击查看答案
题目内容
（请给出正确答案）
参考答案
十点题库官方参考答案
（由十点题库聘请的专业题库老师提供的解答）
