Eurosclerosis

AAA

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 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.

RELATED TERMS
  1. Social Security Benefits

    The monetary benefits received by retired workers who have paid ...
  2. Economics

    A social science that studies how individuals, governments, firms ...
  3. Stagnation

    A prolonged period of little or no growth in the economy. Economic ...
  4. Growth Recession

    An expression coined by economists to describe an economy that ...
  5. Loan Modification

    A modification to an existing loan made by a lender in response ...
  6. Insurance Inflation Protection

    Insurance inflation protection is designed to allow policyholders ...
Related Articles
  1. The Economics Of Labor Mobility
    Economics

    The Economics Of Labor Mobility

  2. What Is Fiscal Policy?
    Economics

    What Is Fiscal Policy?

  3. A Review Of Past Recessions
    Insurance

    A Review Of Past Recessions

  4. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center