Nobel-prize winning economist Robert Mundell, whose research contributed to creation of the euro, said the European Central Bank should ease monetary policy.
“Given the fiscal situation that countries have, I think that it would be better if the central bank followed an easier monetary policy,” Mundell told reporters in Lindau, Germany. He added that he didn’t “agree with Trichet’s decision to raise interest rates” this year.
Mundell said that the situation in the euro area is “very dangerous” and the single currency could “go down the drain” if politicians didn’t act to contain the crisis.
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