Thursday, October 04, 2012 – by Staff Report, Daily Bell
Multiplying Europe's fiscal suicide (technical) ... The entire EU austerity plan is based on a false premise. This disastrous error is now clear beyond any reasonable doubt. The Teuto-Calvinists believe – or profess to believe, since much of their dogma is national self-interest dressed up as theory – that the fiscal multiplier is around 0.5. That is to say, fiscal retrenchment worth 1pc of GDP will cut output by half as much, or around 0.5pc over two years. There is pain, but at least there is gain. This is based on the IMF's analysis of fiscal crises over the decades. Well, it has not worked out like that. Ireland has contracted at nearly seven times the speed, Spain four times, and Greece three times. – Ambrose Evans-Pritchard/UK Telegraph
Dominant Social Theme: Technocratic approaches make the most sense. If you simply plan by the numbers you can organize everything.
Free-Market Analysis: Ambrose Evans-Pritchard is back with another try at organizing the world according to "monetarism."
Long ago, we recall reading that this adept mainstream journo did NOT consider himself a monetarist, or Keynesian, or anything else mainstream but in this article he seems to be trying on monetarist garb.
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