Friday, February 12, 2010

Double Dip Ahead

Figures released today show that Germany didn't grow at all in the last quarter of 2009, registering a change in GDP over that period of 0%. France grew stronger than expected, but overall the Eurozone grew by just 0.1% compared to 0.4% in 2009Q3, raising fears of a double dip recession.

The article describes Germany's resurgence as being export-led - exports are an injection of money into the circular flow. However, domestic demand appears to still be weak, and it is always difficult to rely on the spending of other countries for growth in your own economy, since this is less under the potential control of domestic policymakers (via monetary or fiscal policy).

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