In "Euroland policymakers are deeply divided about the appropriate policy" they should use in order to "overcome its own weakness" says Thomas Mayer, the managing director and senior economist of Goldman Sachs in Frankfurt (Mayer). Mayer says that Euroland "wants to stimulate domestic demand by lowering interest rates" and also they want to "increase disposable income and consumption... [by] encouraging labor unions to boost wages" (Mayer). These proposals, to stimulate the 11 countries in Euroland, have …
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showed last 75 words of 425 total
…in the market and that money is spent, the spent money will multiply into greater amounts then from when it was originally gained. To conclude Keynes would agree completely with the monetary policy that Euroland is proposing. Not only will it stimulate the economy with the multiplier effect, but it will also lower the unemployment. All in all these short run changes will boost the economies in Euroland and take them out of their recession.