European officials thought that austerity was part of what they called their 'convergence policies,' of trying to bring countries together. Instead, it actually made things worse. There's more inequality within countries and more disparity across countries.
Interpretation
Austerity measures intended to unify European countries have instead exacerbated inequality.
Joseph Stiglitz critiques the convergence policies adopted by European officials during periods of austerity, arguing that rather than promoting equality and cohesion among countries, these policies have led to increased inequality both within individual nations and across the continent. The quote suggests that such economic strategies have failed to achieve their intended goals and may have harmful consequences instead.
In practice
During a discussion on economic policies, one might say, 'As Stiglitz notes, austerity often increases inequality,' to emphasize the drawbacks of such measures.
Free migration within Europe means that countries that have done a better job at reducing unemployment will predictably end up with more than their fair share of refugees. Workers in these countries bear the cost in depressed wages and higher unemployment, while employers benefit from cheaper labor.
I don't think we can have democracies that work where most of the people are not benefiting economically, where most of the people are worried about their job security.
Let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It's not going to happen in the United States, and it's not going to happen in Europe.
What separates developing countries from developed countries is as much a gap in knowledge as a gap in resources.
One of the arguments I make for the failure of the euro is that, at the time it was being constructed, there was a 'neo-liberal' ideology which said that all we need to do to make this thing work is to get deficits low, keep inflation low, and take down barriers, and then everything would be fine.
Trump sees the world in terms of a zero-sum game. In reality, globalisation, if well managed, is a positive-sum force: America gains if its friends and allies - whether Australia, the E.U., or Mexico - are stronger. But Trump's approach threatens to turn it into a negative-sum game: America will lose, too.
Raising the minimum wage allows business people to stop thinking about workers simply as costs to be cut and allows you to start thinking about workers as customers to be cultivated.
Those who advocate devaluation are calling for a reduction in the wage levels and the real wage standards of every member of the working class.
When the economic well-being of their nation demanded a strong and creative response, my colleagues at the Federal Reserve... mustered the moral courage to do what was necessary.
If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God.
The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences.
There would be plenty of justification to raise revenues in order to subsidize businesses that employ low-wage workers. But there can be no justification for pandering to the economy's entire bottom half merely to attract its votes.
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