Economics papers

Economic policies that place greater reliance on the principles of free markets, price stability, and flexibility have been the key to these successes. Recently, however, several powerful new economic forces have begun to change the economic landscape, and these principles are being challenged with far reaching implications for . economic policy, both domestic and international. A financial crisis flared up in 2007 and turned into a severe panic in 2008 leading to the Great Recession. How we interpret and react to these forces—and in particular whether proven policy principles prevail going forward—will determine whether strong economic growth and stability returns and again continues to spread and improve more people’s lives or whether the economy stalls and stagnates.

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ISSN (Internet) 1725-3187

Economic Papers are written by the staff of the Directorate General for Economic and Financial Affairs (DG ECFIN) or by experts working in association with them. The series intends to increase awareness of the analytical work done on EU economic issues and to seek comments and suggestions for further analyses.

Views expressed represent exclusively the positions of the author and do not necessarily correspond to those of the European Commission.

Economics papers

economics papers

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