Weekend Viewing: Matt Parker: What Happens When Maths Goes Wrong?
A Historical View of Trump

Ken Rogoff has picked up the goal posts and moved them five miles down the field! Recall his (and Carmen Reinhart's) austerity line from 2011:

Too Much Debt Means the Economy Can’t Grow: "Current debt trajectories are a risk to long-term growth and stability.... [Debt] burdens above 90 percent are associated with 1 percent lower median growth..."

But it turns out "austerity" does not mean "move heaven and earth to keep debt-to-annual GDP less than 90%, no matter how high current unemployment". Instead, all "austerity" means is:

Kenneth Rogoff: The Austerity Chronicles: "Alesina, Favero, and Giavazzi find that their main conclusions are valid even at the zero bound.... Expenditure-based austerity programs tend to impose lower costs on output than do programs based on tax hikes... [A] politician who tries to adopt an austerity program will [not necessarily] be kicked out of office.... The nature of any pathbreaking scholarship is that it sets the agenda for further research. Alesina, Favero, and Giavazzi have written a fundamentally non-ideological book that raises the bar for future studies of fiscal retrenchment policies. No doubt it will continue to set the standard for such research for many years to come, however much left-leaning polemicists try to dismiss it as blasphemy...


#noted

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