The Euro: Winners and Losers

[raspberry-blower]

Whilst it should be apparent to anyone with a pulse who the Euro was designed to benefit, Chris Hamilton has posted a very thought provoking essay as to why.

To highlight the linkage of Core populations to economic activity, the chart below shows the European 25-54yr/old population vs. the best indicator of economic activity, total energy consumption (data available starting from 1980). The implications are pretty straightforward. European economic activity (& resultant energy consumption) will contract for decades, at a minimum, with the declining Core population. The pie is shrinking and now it's simply a fight for who gets bigger slices

Whether the decline in energy consumption will offset declining decent quality oil production remains to be seen.

Chris Hamilton: Euro Saves Germany, Slaughters the PIIGS

Ultimately the way in which the Euro was created will result in its demise. Wynne Godley called that back in 1992

[johnhemming2]

I think it is a mistake to ignore the issue of changes in energy intensity of GDP. Furthermore Germany is unique in taking in East Germany. Merely bringing East Germany to an average GDP of the same as the rest of Germany without increasing Western Germany's GDP would mean a substantial increase in German GDP. That factor has been ignored.

[raspberry-blower]

I think it is a mistake to ignore the issue of changes in energy intensity of GDP.

Actually energy in the role of production is overlooked in economic theory and that this dates back to the time of Adam Smith.

Prof Steve Keen: The Role of Energy in Production