Europe’s Woes Pose New Peril to Recovery in the U.S.

This article discusses some of the very negative impacts that the European financial crisis will have on the US economy. It is a good article for helping us to remember how globalized our economic systems are, and a crisis in an economic system as big as the European Union will have detrimental effects abroad. One point that the author makes is that the dollar will appreciate relative to the Euro, making our exports more expensive and decreasing net exports over time. This can clearly be seen and understood in the open economy models that we created in class, so I though that it was interesting to see a real life example of the model. This will not be the only effect of the crisis on the US. The depreciation of the Euro will also effect financial institutions, US investment abroad, and more. It is sometimes easy to forget how much other country's financial situations will affect us, and this article is a good reminder of how important Europe's health is to our survival. We are interconnected, and their failure is not a benefit to us.