Skip to main content

Expansionary Austerity - a Guide to Killing Zombie Economists


Pondering the puzzle of far too many zombie economists, many of European, English, and American fresh-water origin, I started researching how to REALLY kill a zombie.

The recent tragic British recessionary news motivates this research. Britain receded into a recession in the fourth quarter, making the current depression the longest even considering the prior depression. This NIESR chart is from Jonathan Portes, Director, National Institute of Economic and Social Research, previously, Chief Economist at the UK Cabinet Office. Notice that, in Britain, this depression is also almost as deep as the prior one.


Menzie Chinn, of the University of Wisconsin, Madison, also weighs in with his view which highlights the drastic difference that zombie-supporting political ideologues make in the affairs of nations. Here is his chart:

And Chris Dillow, via Mark Thoma, both have the same question I do (minus the zombie part).

So, I feel I am on solid ground in my quest. The best reference so far for killing zombies (not refereed a.f.a.i.k.), seems to be the Zombie Wiki.

The essential step, though there are many, is destroying the brain of the zombie. That sounds about right to me, though I would hope these charts and the recent IMF studies would destroy the offending brain cells. I think it's way past time
that expansionary austerity die its deserved death. Waiting for dark, got my high power flash and brain destroying implements. Off to hunt Zombies.

Can anyone identify the economist in the opening picture?

Update: Here is a link to the IMF Working Paper; the conclusion is at page 30, but take a minute to browse their graphs. Austerity is contractionary.

Comments

  1. "Can anyone identify the economist in the opening picture?"

    I'm not sure about his name, but I've seen him around Martin Place (Sydney).

    My guess is that he works at the Reserve Bank of Australia (otherwise, he is at the Commonwealth Bank).

    ReplyDelete
    Replies
    1. Hello Magpie (here in NA a bird of great intelligence and voice). Well, that would be great...but I suspect this is a figure in the public eye that is an internationally known economist or some suitable imposter. I just can't quite place him....

      Delete
  2. The IMF research dept has some timid critiques of expansionary contractions. Krugman uses them as an example of how austerity is incorrect, but note that IMF is in fact for moderate austerity. Blanchard has been explicit about it. I would´n't use the IMF as an example. For a critique of the IMF see last year UNCTAD's Trade and Development Report chapters 2 and 3 (http://www.unctad.org/en/docs/tdr2011_en.pdf)

    ReplyDelete
  3. Yes, caution about the IMF is warranted. I should be very specific here...I am referring to an IMF working paper (so the normal author's opinion yadayada) that seems definitive. At least in the short term, austerity is contractionary. I'll update the blog with the link

    ReplyDelete

Post a Comment

Popular posts from this blog

A few brief comments on Brexit and the postmortem of the European Union

Another end of the world is possible
There will be a lot of postmortems for the European Union (EU) after Brexit. Many will suggest that this was a victory against the neoliberal policies of the European Union. See, for example, the first three paragraphs of Paul Mason's column here. And it is true, large contingents of working class people, that have suffered with 'free-market' economics, voted for leaving the union. The union, rightly or wrongly, has been seen as undemocratic and responsible for the economics woes of Europe.

The problem is that while it is true that the EU leaders have been part of the problem and have pursued the neoliberal policies within the framework of the union, sometimes with treaties like the Fiscal Compact, it is far from clear that Brexit and the possible demise of the union, if the fever spreads to France, Germany and other countries with their populations demanding their own referenda, will lead to the abandonment of neoliberal policies. Aust…

A brief note on Venezuela and the turn to the right in Latin America

So besides the coup in Brazil (which was all but confirmed by the last revelations, if you had any doubts), and the electoral victory of Macri in Argentina, the crisis in Venezuela is reaching a critical level, and it would not be surprising if the Maduro administration is recalled, even though right now the referendum is not scheduled yet.

The economy in Venezuela has collapsed (GDP has fallen by about 14% or so in the last two years), inflation has accelerated (to three digit levels; 450% or so according to the IMF), there are shortages of essential goods, recurrent energy blackouts, and all of these aggravated by persistent violence. Contrary to what the press suggests, these events are not new or specific to left of center governments. Similar events occurred in the late 1980s, in the infamous Caracazo, when the fall in oil prices caused an external crisis, inflation, and food shortages, which eventually, after the announcement of a neoliberal economic package that included the i…

What is the 'Classical Dichotomy'?