Asset price declines may also reflect a reassessment of the prospects for growth in Europe and Japan, and perhaps also a recognition that U.S. gross domestic product and productivity growth have remained stubbornly low.
Commentators who criticise the social consequences of the European strategy often forget this element and focus only on the effect of budget cuts – which can sometimes fall hardest on vulnerable groups in society. But well-designed reforms can have the opposite effect: they can in fact create opportunities for people on the margins of society.