Eurosclerosis

Dictionary Says

Definition of 'Eurosclerosis'


A term introduced by German economist Herbert Giersch referring to the economic stagnation that can result from a government's overregulation and overly generous social benefits policies. Eurosclerosis, which stems from the medical term sclerosis, meaning the hardening of tissue, describes countries experiencing high rates of unemployment and lagging job creation during periods of economic growth.
Investopedia Says

Investopedia explains 'Eurosclerosis'


Eurosclerosis originally referred to Europe's slow job growth, and, politically, to its slow pace towards European integration. Currently, Eurosclerosis is used to describe an economy that is experiencing stagnation. Some economists believe that a contributing factor leading to Eurosclerosis is the adaptation of overly generous social benefits, such as unemployment benefits, food stamp programs and mortgage-modification programs, which can create disincentives to find and accept employment.

Following periods of high unemployment, employers may be ready to hire, but workers are less apt to work if the benefits outweigh their potential earnings.

comments powered by Disqus
Hot Definitions
  1. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  2. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  3. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  4. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  5. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  6. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
Trading Center