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. Stagnation

    A prolonged period of little or no growth in the economy. Economic ...
  3. Economics

    A social science that studies how individuals, governments, firms ...
  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. Economics

    The Economics Of Labor Mobility

    Loosening labor restrictions has both good and bad effects for a country and its workers.
  2. Economics

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  3. Insurance

    A Review Of Past Recessions

    Here we look at the biggest economic declines in the U.S. since the Great Depression.
  4. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  5. Budgeting

    Planning For Unemployment

    Preparation can help you land on your feet after getting the "old heave-ho".
  6. Economics

    The Great Inflation Of The 1970s

    Political moves meant prevent unemployment served to do the opposite, creating one of the worst fiscal disasters of the century.
  7. Bonds & Fixed Income

    Can Keynesian Economics Reduce Boom-Bust Cycles?

    Learn about a British economist's proposed solution to a common economic problem.
  8. Economics

    What Is Happening To The BRIC Economies?

    Ten years ago, it was about the BRIC countries –Brazil, Russia, India, and China, and it was thought that capitalizing their resources would elevate them.
  9. Economics

    The Economic and Social Effects of Corruption

    Corruption results in inefficiencies in the operations of emerging economies, and prevents such economies from reaching the maximum level of development.
  10. Investing Basics

    Five Successful Investing Strategies

    The secret to investing is that there is no secret. Success is all about knowing yourself, getting the basics and using both to make the right choices.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center