Monday, October 3, 2016

A General Theory Of Austerity? || Paul Krugman



Paul Krugman:

Simon Wren-Lewis has an excellent new paper (PDF) trying to explain the widespread resort to austerity in the face of a liquidity trap, which is exactly the moment when such policies do the most harm. His bottom line is that

austerity was the result of right-wing opportunism, exploiting instinctive popular concern about rising government debt in order to reduce the size of the state.

I think this is right; but I would emphasize more than he does the extent to which both the general public and Very Serious People always assume that reducing deficits is the responsible thing to do.







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