Paul Krugman is an economics Nobel Laureate.
But Nobel Prize or no Nobel Prize he needs a man on the practical front to support his ideas-like Google CEO Eric Schmid.
The idea is that US and Europe should spend more:
No the situation is the opposite.
Because of economic problems some countries in Europe and US have been implementing austerity measures.
This has not restored people's confidence in government measures.
The industry has been reducing its production capacity.
Similar reduction in service sector might take place.
And other factors combine to make the future prospects bleak.
So the Krugmanian, or Schmidian panacea to the economic and financial problems of US and Europe is more spending.
On the face of it this looks like an honest to God Keynesian solution except for an elementary flawed assumption.
The wrong assumption can be stated as follows:
The surprising thing is that it is the same economist who identified that the 2008 problem was caused by the erroneous belief of the economists that our equations must have beauty rather then conforming to reality.
But Nobel Prize or no Nobel Prize he needs a man on the practical front to support his ideas-like Google CEO Eric Schmid.
The idea is that US and Europe should spend more:
.. need ... government stimulation in terms of buying power and investment.Now why should they spend more? Have they got lots of money?
No the situation is the opposite.
Because of economic problems some countries in Europe and US have been implementing austerity measures.
This has not restored people's confidence in government measures.
The industry has been reducing its production capacity.
Similar reduction in service sector might take place.
And other factors combine to make the future prospects bleak.
So the Krugmanian, or Schmidian panacea to the economic and financial problems of US and Europe is more spending.
On the face of it this looks like an honest to God Keynesian solution except for an elementary flawed assumption.
The wrong assumption can be stated as follows:
Economic growth can be sustained for all times.This is in simple terms an insistence on growth economy. Having enjoyed a century of growth economy it is difficult for the developed countries to imagine that their might be a glass ceiling. Housing sector meltdown on 2008 or even the Great Depression are just inconvenient technical details.
The surprising thing is that it is the same economist who identified that the 2008 problem was caused by the erroneous belief of the economists that our equations must have beauty rather then conforming to reality.