Germany had a good crisis---this is how the commentator Satyajit Das, Roubini's fellow blogger and author of "Traders, Guns, and Money"---nicely puts it. Since the subprime crisis spilled over the Atlantic, Germany's output took a leap forward above pre-crisis levels, unemployment plummeted, the budget deficit vanished, and household net wealth grew to about EUR225,000 per household. Today, ECB's monetary policy gives an additional stimulus with interest rates at 1 percent whereas the Taylor rule suggests 4.5 percent would be more appropriate (compared to 2009 when ECB first dropped rates to that level). Recently, the euro started depreciating,...
