Economic epidemiology

20 June 2012

Economic epidemiology

Predicting financial contagion

Jun 16th 2012 | from the print edition

CAN Greece leave the euro quietly? Its size would suggest so: the Greek economy is just 2% of the euro area’s GDP. But so far the Greek crisis has had plenty of noisy knock-on effects. Economists, who like to borrow medical terms to lend themselves an air of scientific rigour, call this “contagion” (see also: Dutch disease, liquidity injection, etc). Economic troubles in one country can infect others. Can economic epidemiology predict which countries might fall sick following a Greek exit?

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