Advertisement


#WITGT21 Paragraph of the Day 

By Simon Wren-Lewis:

What is hardly ever said, so I make no apologies for doing so once more, is that macroeconomic theory has in some ways ‘had a good crisis’. Basic Keynesian macroeconomic theory says you don’t worry about borrowing in a recession because interest rates will not rise, and they have not. New Keynesian theory says creating loads of new money will not lead to runaway inflation and it has not. Above all else, macroeconomic theory and most evidence said that the turn to austerity in 2010 would delay or weaken the recovery and that is exactly what happened. As Paul Krugman often says, it is quite rare for macroeconomics to be so fundamentally tested, and it passed that test. We should be talking not about a phoney crisis in economics, but why policy makers today have ignored economics, and thereby lost their citizens’ the equivalent of a lot of money.

Source: mainly macro: Miles on Haldane on Economics in Crises


Share this post to your economics loving friends:

Please consider following our twitter @WITGT21 or subscribing to our RSS Feed and Newsletter to stay notified of our new interviews.


Like this article?
Maybe you can consider making a small contribution to fund our project
and support our future works. Sure, I can! 🡺

Cloud Yip
Follow me

Cloud Yip

Economics Correspondent and Editor of "Where is the General Theory of the 21st Century?"

Responsible for the writing, editing and other stuff on this website.
My English is very far from perfect, please accept my apology.
If you think this website needs any improvements, please leave a comment and let me know.
Cloud Yip
Follow me