November 27, 2014
Paul Krugman tells us that “Keynes is Slowly Winning.” The immediate cause for celebration is Catherine Mann, the new chief economist at the OECD, calls for stimulus. By contrast, her predecessors in 2011 were calling for rapid increases in interest rates to normalize the economic situation.
This is indeed good news, but as a practical matter the flat-earth crowd is still calling the shots outside of Japan. There is little hope for real stimulus any time soon. The Austerians in power in the EU and to a lesser extent the U.S. are inflicting the sort of damage that our enemies could only dream about. Keynes might be winning slowly, but it is “very slowly.”
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