Wood, R. (2014) “Economic policies pursuant to the Global Crisis: A critique“, VoxEU Organisation, 13 Ιουλίου.
The Global Crisis triggered a series of medium-term policy changes. This column reviews the effectiveness of some of these monetary, fiscal policies, and internal devaluation policies. Policymakers anchored their strategic thinking in paradigms that became inapplicable to the new problems. An alternative set of macroeconomic policies is suggested.
Interrelated economic problems
Current high public debt burdens are due to three main forces:
– Bond-financed fiscal stimulus measures applied in response to the Global Crisis (and the earlier crisis in Japan);
– Lower revenues and higher welfare payments due to sluggish growth and higher unemployment, particularly in countries that adopted strong austerity measures;
– Measures adopted to bail out banks.
In some countries, the deflation tendency is most probably due to inadequate final demand and falling wages. If demand was adequate, but supply was deficient, rising inflation would by now be the major problem.
Σχετικές αναρτήσεις:
- OECD (2014) “Economic Policy Reforms 2014“, Going for Growth Interim Report, Φεβρουάριος.
- OECD (2013) OECD Economic Surveys: Greece 2013, Paris: OECD Publishing.
- OECD (2013) OECD Economic Outlook, Vol. 2013/2, OECD Publishing.