- Fed Watch: As of Yet, Fed Not Changing Tune
- Links for 02-02-15
- 'Saying the Obvious' (about Fiscal Policy)
- 'Demographics and GDP: 2% is the New 4%'
Posted: 02 Feb 2015 12:15 AM PST
Posted: 02 Feb 2015 12:06 AM PST
Posted: 01 Feb 2015 08:43 AM PST
Saying the obvious: Give any student who has just done a year of economics some national accounts data for the US, UK and Eurozone, and ask them why the recovery from the Great Recession has been so slow, and they will almost certainly tell you it is because of fiscal austerity. And they would be right, as I set out in this recent VoxEU piece. There I present some back of the envelope calculations, but they are confirmed by model simulations: not just those I quoted in the text, but also others that I did not have space to mention.
When writing that piece, I kept having doubts. Not about the analysis, but just that this was all so obvious. It uses basic models (DSGE or more eclectic) that we teach undergraduates and postgraduates. It is supported by the clear majority of empirical evidence. I felt like I was telling people the macroeconomic equivalent of a rise in the demand for apples will mean an increase in their price.
Posted: 01 Feb 2015 08:27 AM PST
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