Sullivan says the US economic stimulus worked because of a natural experiment comparing the US and the UK. The United Kingdom did not
adopt a stimulus. Sullivan notes. “After three and a half years, U.S. GDP
is just about returning to the pre-recession peak. That’s awful. But it’s far better than the U.K. where GDP is still five percent ($750 billion in US terms) below its pre-recession peak.” Of course, two data points is just an anecdote and ceteris paribus does not apply, but this is about as good as it gets in macroeconomics. I have yet to see an example of austerity working better than stimulus.
No comments:
Post a Comment