"As is often the case with major disputes in economics, the argument over fiscal policy went on for years, with some critics of fiscal policy still defending their position when this book went to press. It seems fair, however, to say that among economists a more or less Keynesian view of the effects of fiscal policy came to prevail. Careful statistical studies at the International Monetary Fund and else where showed that austerity policies have historically been followed by contraction, not expansion. Recent experience, in which countries like Spain and Greece that were forced into severe austerity also experienced severe slumps, seemed to confirm that observation. Furthermore, it was clear that those who had predicted a sharp rise in U.S. interest rates due to budget deficits, leading to conventional crowding out, had been wrong: U.S. long-term interest rates remained near record lows even during the years from 2009 to 2012, when the government ran very large deficits."
Quote Details
Added by wikiquote-import-bot
Unverified quote
0 likes
Academics from the United StatesEssayists from the United StatesColumnists from the United StatesBloggers from the United StatesEconomists from the United States
Original Language: English
Available Languages (1)
Sources
Chapter 33. Macroeconomics: Events and Ideas
https://en.wikiquote.org/wiki/Paul_Krugman
Revision History
No revisions have been submitted for this quote.
Categories
Paul Krugman
154 quotes on TrueQuotesView all quotes by Paul Krugman →
Related Quotes
"If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparati…"
"If there is one single area of economics in which path dependence is unmistakable, it is in economic geography – the …"
"In the course of describing my formative moment in 1978, I have already implicitly given my four basic rules for rese…"
"I do not mean to say that formal economic analysis is worthless, and that anybody's opinion on economic matters is as…"
"But the honest truth is that what drives me as an economist is that economics is fun. I think I understand why so man…"
"If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it…"
"If economists ruled the world, there would be no need for a World Trade Organization. The economist's case for free t…"
"It is a bit funny, but also quite sad: Those who preach the doctrine of global glut are tilting at windmills, when th…"
"The idea of comparative advantage—with its implication that trade between two nations normally raises the real income…"
"The Sanders campaign has brought out a lot of idealism and energy that the progressive movement needs. It has also, h…"