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?

1 comment :

The Arthurian said...

Well, a political leader could say: "You are telling me what to do today to solve the problem we have today. But today's problem is a result. Go away now, and come back when you can explain to me the long chain of problems, all of them results of an older, more pressing problem."