Sometimes a Single Graph Tells So Much!

Often economics is about finding the right chart to express a certain phenomena. Take a look at the 3 distinct periods above:

  • Before 1999 and the creation of the Euro: Yields on the Greek, Spanish, Italian and Portuguese are much higher than the ones of France and Germany.
  • From 1999 to 2008: Yields of all Euro countries converge dramatically. To get a sense of the reason for this, read the first paragraph of Part 3 of my note on the Euro Crisis.
  • From 2008 and the onset of the crisis onward: Yields diverge dramatically again, but this time with the same currency across all Euro countries!

I find this to be quite a good illustration of what was happening.

Source: http://www.npr.org/blogs/money/2012/06/04/154282337/the-crisis-in-europe-explained

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One Response to Sometimes a Single Graph Tells So Much!

  1. Manu says:

    Interesting to see that the rates are lower than in 1995 for all countries (but Ireland). So why do they complain???

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