Sunday, 8 March 2015

Simon Wren-Lewis on Nick Rowe's question for those who oppose Austerity

Simon Wren-Lewis writes a very  good article in response to Nick Rowe who asked  a 'very silly' question for those people who oppose austerity. Namely  would you still advocate fiscal stimulus in a liquidity trap (with interest rates stuck at some lower bound - the ZLB) if government debt was ten times annual GDP?

Wonderful article and highly instructive.