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Wednesday, June 27, 2012

'A Manifesto for Economic Sense'

Paul Krugman and Richard Layard:

A manifesto for economic sense, by Paul Krugman and Richard Layard, Commentary, Financial Times: More than four years after the financial crisis began, the world’s major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s. The reason is simple: we are relying on the same ideas that governed policy during that decade. These ideas, long since disproved, involve profound errors both about the causes of the crisis, its nature and the appropriate response.
These ideas have taken root in the public consciousness, providing support for the excessive austerity of fiscal policies in many countries. ... As a result of their mistaken ideas, many western policy makers are inflicting massive suffering on their peoples. But the ideas they espouse about how to handle recessions were rejected by nearly all economists after the disasters of the 1930s. It is tragic that in recent years the old ideas have again taken root.
The best policies will differ between countries and will require debate. But they must be based on a correct analysis of the problem. We therefore urge all economists and others who agree with the broad thrust of this manifesto for economic sense to register their agreement online and to publicly argue the case for a sounder approach. The whole world suffers when men and women are silent about what they know is wrong.

    Posted by on Wednesday, June 27, 2012 at 01:26 PM in Economics | Permalink  Comments (61)


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