This post offers readers a fully-fledged analytical model of the unfolding Eurozone Crisis. It begins with a macro-economic analysis of the Crisis’ causes and then, importantly, models the feedback between Europe’s institutional and policy responses and the contagion process that began with Greece. For the fully-fledged (wonkish) version of the paper,
click here ( http://varoufakis.files.wordpress.com/2013/03/from-contagion-to-incoherence-a-simple-macroeconomic-model-of-the-eurozone-crisis1.pdf ). What follows below is a maths-free summary of each of the paper’s sections.