Wednesday, 8 January 2014

Monetary policy versus Fiscal Policy.

Simon Wren-Lewis is mystified why some people wish to downgrade the usefulness of fiscal policy when there is a liquidity trap.
Mark Thoma shows how-to-tell-if-fiscal-policy-works.  Brad De Long hops in as well.

Given all the evidence of how potent fiscal policy is ( see the IMF but also Adam Posen on Japan both of which have been highlighted here)  I can think of only two reasons.
The person saying this is stark raving mad like Katesy or they are simply playing politics.