Monetarist view cannot explain eurozone inflation woes, Nobel laureate warns
Christopher Sims says lack of co-ordinated fiscal action dooms eurozone to prolonged lowflation
Fiscal authorities need to make a credible commitment to expansionary policy that will not be offset by future tightening if the rich world's moribund economies are to break free of low inflation that is immune to rock-bottom interest rates, according to economics Nobel laureate Christopher Sims.
Addressing a meeting yesterday of fellow Nobel Prize-winning economists and young economists in Landau, Germany, Sims explained his belief that the monetarist view of how the price level is set –
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