The IMF’s Chief Economist, Olivier Blanchard, last week published a paper suggesting that fiscal multipliers were higher than implicitly assumed by forecasters when making the case for austerity measures. Owen Tudor reflects on what has widely been interpreted as a “mea culpa” by the IMF and its implications for the politics of austerity.
Paul Krugman argues that we have seen a massive failure of economic policy, with many of those responsible both retaining power and refusing to learn from the experience.
While Blanchard’s revaluation of the impact of fiscal austerity has received much attention, Fabian Linder points out that some IMF researchers reached this conclusion almost a decade ago.
Simon Wren-Lewis offers a thoughtful reflection on the communications impasse confronting those who might wish to argue for more government borrowing in the media.
Jonathan Jones takes issue with the coalition’s deficit reduction claims, pointing out that they are now cutting the deficit more slowly than Alistair Darling proposed in 2010.