The World Is More "Vulgar Keynesian" than I Had Imagined
And those economists--Paul Krugman, Dean Baker, Nouriel Roubini--who were warning that it might be should get credit for what they said long ago in the days of the Great Moderation.
Duncan Black:
Eschaton: Maybe We Can Tell People Who Was Right?: Maybe editors can invite those who were screaming about bond vigilantes to write heartfelt apologies to all of those they helped to condemn to long term economic suffering? Just kidding, they'd just write how brave and bold it was to be a part of their very smart club, even though they're wrong about everything.
Paul Krugman:
One Point Seven Seven: That’s the current interest rate on 10-year US bonds.
Remember, back in 2009 there was a big debate between people like me, who said that we were in a liquidity trap and that interest rates would stay low as long as the economy was depressed, and people like the WSJ editorial page and Niall Ferguson, who said that government borrowing would bring on the bond vigilantes and send rates soaring.
How’s it going?
And just to be clear: this isn’t just about I-told-you-so. We’re talking about different models, different visions of how the economy works. Their vision led to calls for austerity now now now; mine said that the overwhelming danger was that we wouldn’t provide enough stimulus, and that we would pull back too soon. Sure enough, we didn’t and we did. And now catastrophe looms.
