Europe's Inflation Gap

A blog about business and economics.
Aug. 9 2012 3:55 PM

Europe's Inflation Gap

1344542110384

America's awesome stats-and-charts web service FRED now has price data from the European Union's horrible Eurostat, so it's finally possible for chart-bloggers to write about European prices!

Here above is a simple look at the main inflation index for Spain and for Germany. What you see here is that the overall price level has been rising much faster in Spain than in Germany. And while the eurozone has many problems, this is in a lot of ways the problem. Not irresponsible public borrowing or scandalous banks or anything else. Conditions in Spain are just pretty different from conditions in Germany. But the European Central Bank has to try to make monetary policy for both of them. That's really really hard.

Advertisement

If Spain and Germany were just different places in the same country, the fact that monetary policy is inevitably out of whack somewhere might be okay. Folks would move and the system would adjust. But Spain and Germany have different tax codes and different welfare states. They have different languages and different professional licensing systems. And they're different countries, with different traditions and different nationalisms. Yoking them together into a single economic policy unit is just very very difficult and very very problematic.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

Global Marches Demand Action on Climate Change

Politics

Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

  News & Politics
Weigel
Sept. 20 2014 11:13 AM -30-
  Business
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
  Life
Quora
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Tv Club
Sept. 21 2014 1:15 PM The Slate Doctor Who Podcast: Episode 5  A spoiler-filled discussion of "Time Heist."
  Arts
Television
Sept. 21 2014 9:00 PM Attractive People Being Funny While Doing Amusing and Sometimes Romantic Things Don’t dismiss it. Friends was a truly great show.
  Technology
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 21 2014 8:00 AM An Astronaut’s Guided Video Tour of Earth
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.