When Europe Stumbled

Paul Krugman:

When Europe Stumbled: Doing some homework on the European economy...

... What was happening in 2011-2012? Europe was doing a lot of austerity. But so, actually, was the U.S., between the expiration of stimulus and cutbacks at the state and local level. The big difference was monetary: the ECB’s utterly wrong-headed interest rate hikes in 2011, and its refusal to do its job as lender of last resort as the debt crisis turned into a liquidity panic, even as the Fed was pursuing aggressive easing.

Policy improved after that... But I think you can make the case that the policy errors of 2011-2012 rocked the euro economy back on its heels...

Oh, and America might have turned European too if the Bernanke-bashers of the right had gotten what they wanted.