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If you look now, you will see that this is simple not true. Countries with independent aggressive monetary policy did the best. Countries one the Euro that did

by nickik 10y ago

If you look now, you will see that this is simple not true. Countries with independent aggressive monetary policy did the best. Countries one the Euro that did Austerity did better then those that increased taxes. Maybe in Krugmans fantasy land you can do neither, but most people live in the real world. The IMF actually apologized to Britain after attacking it about cuts. It was Krugman that was horrible wrong on the US for example, anybody remember the "fiscal cliff" in 2013? Krugman and friends went large and issued dire warning, he even called it a "test for market monetarism". Not a single blip in GDP was observed and then Krugman promptly denied everything.

dimitar 10y ago
Today's prominent Keynesians certainly still advocate for independent aggressive monetary policy, but they also claim that fiscal policy matters a lot. In the case of the "fiscal cliff"/sequester, there was indeed fiscal tightening in the federal government, but it was offset by less tightening at the state level. Does that mean it was wrong to warn against cuts at any level of government? Of course not. Here is Krugman, acknowledging why this situation might be confusing. https://krugman.blogs.nytimes.com/2015/06/22/2013-and-all-that/ https://krugman.blogs.nytimes.com/2015/06/22/2013-and-all-th...
- nickik 10y ago
  Krugman, Krugman, when other people make evasion like that, then he attacks them so aggressively that you would think it was personal. When he does it, it is simply that people did not understand his arguments. If there was tighting before 2013 already, that makes his story even worse. Why did the economy continue to grow on path when there 4 years of tighting? Taking the 'cyclically adjusted data' to save his point is pretty fishy to me. Its also not true that Krugman always advocated for more aggressive monetary policy, they all claimed that monetary policy was 'out of ammo' and fiscal expansion was needed. He said that

by nickik 10y ago

dimitar 10y ago

Today's prominent Keynesians certainly still advocate for independent aggressive monetary policy, but they also claim that fiscal policy matters a lot. In the case of the "fiscal cliff"/sequester, there was indeed fiscal tightening in the federal government, but it was offset by less tightening at the state level. Does that mean it was wrong to warn against cuts at any level of government? Of course not. Here is Krugman, acknowledging why this situation might be confusing. https://krugman.blogs.nytimes.com/2015/06/22/2013-and-all-that/ https://krugman.blogs.nytimes.com/2015/06/22/2013-and-all-th...

nickik 10y ago
Krugman, Krugman, when other people make evasion like that, then he attacks them so aggressively that you would think it was personal. When he does it, it is simply that people did not understand his arguments. If there was tighting before 2013 already, that makes his story even worse. Why did the economy continue to grow on path when there 4 years of tighting? Taking the 'cyclically adjusted data' to save his point is pretty fishy to me. Its also not true that Krugman always advocated for more aggressive monetary policy, they all claimed that monetary policy was 'out of ammo' and fiscal expansion was needed. He said that