{"id":18165,"date":"2016-02-23T13:24:57","date_gmt":"2016-02-23T18:24:57","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18165"},"modified":"2016-02-23T13:24:57","modified_gmt":"2016-02-23T18:24:57","slug":"how-italy-will-fail-and-drag-down-the-european-project","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18165","title":{"rendered":"How Italy will fail and drag down the European Project"},"content":{"rendered":"<header class=\"entry-header\">\n<h3 class=\"entry-title\"><a href=\"http:\/\/bawerk.net\/2016\/02\/23\/how-italy-will-fail-and-drag-down-the-european-project\/\" target=\"_blank\">How Italy will fail and drag down the European Project<\/a><\/h3>\n<div class=\"entry-meta clearfix\">\n<div class=\"author-avatar pull-left\">Italy is big enough to matter (it is the eight largest economy on the planet), but so uneventful that most does not pay any attention to what is going on there. We contend that Italy will, during the next year or two, be on everyone\u2019s radar screen as it has the potential to derail the European project for real.<\/div>\n<\/div>\n<\/header>\n<div class=\"entry-content\">\n<div>\n<p>Greece, Portugal and Ireland were mere test subjects for what will come. Spain would have been a challenge, but were narrowly avoided. Italy will drag the whole structure down if it continues on its current trajectory, and there is nothing to suggest it will change course.<\/p>\n<div class=\"googlepublisherpluginad\"><ins class=\"adsbygoogle\" data-ad-client=\"ca-pub-9050213028195805\" data-ad-slot=\"6724749178\" data-ad-format=\"auto\" data-ad-channel=\"WordPressSinglePost\" data-tag-origin=\"pso\" data-adsbygoogle-status=\"done\"><ins id=\"aswift_1_expand\"><ins id=\"aswift_1_anchor\"><iframe id=\"aswift_1\" name=\"aswift_1\" width=\"597\" height=\"60\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/ins><\/ins><\/ins><\/div>\n<p>The main problem for Italy is its stagnating level of nominal GDP, which we refer to as \u201cJapanificaton\u201d of the economy. While people usually think of deflation when they hear \u201cJapan\u201d, that is not an entirely correct observation. It is true that nominal GDP flat lined after the crisis in the 1990s which dragged down revenue. However, if it was truly a deflationary period, expenditures should fall also as prices paid for services rendered would drop concomitantly. This has not been the case and it is more correct to say Japan has been trapped in a revenue \/ NGDP deflation, hence the perceived need for Abenomics, or in plain English, the creation of a helluva lot of currency units to boost NGDP and revenue and thus reduce the need for bond issuance. As our first chart show, so far it has been modestly successful. Please note that Abenomics have nothing to do with creating\u00a0<em>real<\/em>\u00a0prosperity (no one can be that ignorant), but all about getting the spiraling debt problem under control by jacking up the inflation tax.<a href=\"http:\/\/i0.wp.com\/bawerk.net\/wordpress\/wp-content\/uploads\/2016\/02\/Italy-1.jpg\" data-slb-group=\"603\" data-slb-active=\"1\" data-slb-internal=\"0\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-604\" src=\"http:\/\/i0.wp.com\/bawerk.net\/wordpress\/wp-content\/uploads\/2016\/02\/Italy-1.jpg?resize=730%2C479\" alt=\"Italy 1\" width=\"597\" height=\"392\" \/><\/a><\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>How Italy will fail and drag down the European Project Italy is big enough to matter (it is the eight largest economy on the planet), but so uneventful that most does not pay any attention to what is going on there. We contend that Italy will, during the next year or two, be on everyone\u2019s [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1265,12575,202,12574,284,353,1167,1512,1464,452,4696,743],"class_list":["post-18165","post","type-post","status-publish","format-standard","hentry","category-economics","tag-abenomics","tag-bawerk-com","tag-deflation","tag-eugen-von-bohm-bawerk","tag-european-union","tag-gdp","tag-greece","tag-ireland","tag-italy","tag-japan","tag-portugal","tag-spain"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18165"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18165\/revisions"}],"predecessor-version":[{"id":18166,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18165\/revisions\/18166"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}