Friday, February 19, 2010

Economics in Disarray: To Stimulate or to Tighten

Several joint letters have appeared in the past few days, signed by Nobel Laureates and distinguished professors of economics in the leading universities in the U.S. and U.K.

One set recommends further stimulus spending to create jobs and restore growth, while maintaining loose monetary policy. The other recommends halting stimulus spending, paying down public debt, and gradual tightening of monetary policy.

What’s a political leader to do in the face of conflicting advice and claims from the economics community, especially since neither group of signers is particularly humble in their academic claims and advice?

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