Monday, July 19, 2010

Krugman: Economics and Politics - Paul Krugman Blog -

I spent some time reding this and the comments of other readers -- especially comment #31:

Economics and Politics - Paul Krugman Blog - "I’ll be frank: the discussion of fiscal stimulus this past year and a half has filled me with despair over the state of the economics profession. If you believe stimulus is a bad idea, fine; but surely the least one could have expected is that opponents would listen, even a bit, to what proponents were saying. In particular, the case for stimulus has always been highly conditional. Fiscal stimulus is what you do only if two conditions are satisfied: high unemployment, so that the proximate risk is deflation, not inflation; and monetary policy constrained by the zero lower bound."