Euro is marked as inefficient as it has seen the credit infused growth for the last twenty years because of which, many inefficient reasons are sustaining that remained undetected or un-addressed. Another reason of inefficiency is inefficient allocation of resources which further leads to underemployment or unemployment.
The time is not far when the issue of real economy will demand resolution, but till the time, many economists and central bankers are focusing on the effects of financial markets of euro without including its impact on real economy. The area that needs most of the attention in economy is labour market.
The market analysts quote Europe's economy as an open economy in which availability of weak currency helps terms of trade in Europe and also perks up its balance of trade. Though boosting exports in Eurozone is not easier at this time; still, if it manages to boost its exports, the profit distribution will be unbalanced.
The experts are of the view that that there were three reasons for how and why US has outpaced Europe in the period of rehabilitation. And those are - economic structure, policy decisions and culture.
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