Independent Strategy

The compartments of contagion

On a dark day it may sound fanciful to ask if Italy can save the euro and the world. But it has the power to make the euro crisis much better or worse. To understand why, consider the way contagion works. Procrastination makes the cost of stopping the crisis increase exponentially. This happens as fear spills over from one compartment to another and from one country to another.

The T-map of this process is shown below.

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