Second, long spells of crisis-related unemployment have resulted in so-called “hysteresis effects” in the labour market – that is, where workers are unemployed for so long that they lose their skills and become unemployable.
You might be wondering: can the government bear this burden or is it in danger of being overwhelmed? In the following I would like to talk about the current economic crisis, explain the fiscal and monetary policy responses and outline what I believe to be important.