ο Ρεν του τρόμου

Δριμεία επίθεση κατά του αντιπροέδρου της Κομισιόν και επιτρόπου Οικονομίας Όλι Ρεν και της πολιτικής σκληρής λιτότητας που επιλέγει να εφαρμόσει έναντι της κρίσης χρέους που έχει πλήξει την Ευρωζώνη, εξαπολύει ο διεθνούς φήμης Αμερικανός οικονομολόγος Πολ Κρούγκμαν, χαρακτηρίζοντάς τον μάλιστα ως «ο Ρεν του τρόμου». 
Γνωστός πολέμιος της λιτότητας ο Kρούγκμαν, αναφέρει στο τελευταίο του άρθρο στους New York Times: «Ο Ρεν πρόσφατα δήλωσε: Το μεγάλο πρόβλημα της λιτότητας δεν είναι ότι δεν αποδίδει, αλλά το γεγονός πως ολοένα και περισσότεροι οικονομολόγοι διαμηνύουν πως δεν αποδίδει!».
Ο οικονομολόγος συνεχίζει λέγοντας, ότι ο Ρεν επιμένει να δηλώνει πως κάθε πολιτική που έχει να κάνει με αυστηρή δημοσιονομική πειθαρχία είναι ικανή να καλλιεργήσει το αναγκαίο έδαφος για την ανάκαμψη.
Εκτιμά πως η ευρωπαϊκή οικονομία θα ανακάμψει το 2014, με την ανάπτυξη για την Ευρωζώνη να τοποθετείται στο 1,4%. Ο Ρεν θεωρεί πως η Ευρωζώνη πρέπει να συνεχίσει στο δρόμο των μεταρρυθμίσεων χωρίς να χαθεί το momentum..
«Kύριε Ρεν εντάξει έχετε δίκιο, όλα βαίνουν καλώς!» αναφέρει με ειρωνικό τόνο ο οικονομολόγος.
«Η Ελλάδα και όλες οι άλλες ευρωπαϊκές χώρες που ακολουθούν αυστηρά μέτρα λιτότητας τελικά τι κέρδισαν;» διερωτάται.
Και απαντά: Κατέστησαν ακόμη πιο δυσχερή τη δημοσιονομική τους κατάσταση.

http://www.sofokleousin.gr/archives/125874.html

Paul De Grauwe and the Rehn of Terror

Nobody has taught me as much about the euro crisis as Paul De Grauwe, who brought to the fore a crucial point almost everyone was overlooking: the importance of self-fulfilling debt panics in countries that no longer have their own currencies. Now he has a new paper with Yuemei Ji following up on that insight, and offering yet more evidence of the incredible unwisdom of European economic policy.
What De Grauwe and Ji show is that the rush to austerity in Europe largely reflected the surge in sovereign debt spreads after Greece got in trouble; the bigger the spread, the harsher the austerity. But it turned out that the spreads didn’t reflect underlying fiscal fundamentals. De Grauwe had already made that point by comparing the UK with Spain; similar fiscal outlooks, wildly different borrowing costs. Now he has another piece of evidence, the spectacular decline in spreads once the ECB signaled its willingness to buy sovereign debt if necessary, thereby removing fears of a self-fulfilling liquidity crisis.
Meanwhile, all that austerity has taken a terrible toll. De Grauwe and Ji offer us yet another revealing scatterplot, using announced austerity measures in 2011:

But hey, Keynesian economics can’t be right, can it?
And they also show that countries pursuing austerity have by and large seen their debt positions worsen:

But take heart. Olli Rehn of the European Commission, last heard declaring that the big problem with austerity isn’t that it doesn’t work, it’s the fact that economists keep publishing studies showing that it doesn’t work, says that the only thing we have to fear is fear itself:

Mr. Rehn insisted that Europe’s belt-tightening policies were working and would lay the groundwork for a recovery. He said the European economy should expand in 2014, with growth reaching 1.6 percent across the Union and 1.4 percent in the euro area.
“We must stay the course of reform and avoid any loss of momentum, which could undermine the turnaround in confidence that is underway, delaying the needed upswing in growth and job creation,” he said in the statement.

Well, that’s all right, then.

http://krugman.blogs.nytimes.com/2013/02/22/paul-de-grauwe-and-the-rehn-of-terror/

Austerity Europe

Some readers have been asking me for the data source for Paul De Grauwe’s measure of austerity. I’m working on it. Meanwhile, however — and partly for my own reference — I discovered that I can do a similar exercise over a somewhat longer time horizon, which I’m posting in large part as a note to myself.
Now, measuring austerity is tricky. You can’t just use budget surpluses or deficits, because these are affected by the state of the economy. You can — and I often have — use “cyclically adjusted” budget balances, which are supposed to take account of this effect. This is better; however, these numbers depend on estimates of potential output, which themselves seem to be affected by business cycle developments.
So the best measure, arguably, would look directly at policy changes. And it turns out that the IMF Fiscal Monitor provides us with those estimates, as a share of potential GDP, for selected countries from 2009 to 2012 (Table 15). What I’ve done is to plot those estimates (horizontal axis) against changes in real GDP from 2008 to 2012 (vertical axis). Here it is:

The implied multiplier is 1.2; the R-squared is 0.84.
In normal life, a result like this would be considered overwhelming confirmation of the proposition that austerity has large negative impacts. Yes, you can concoct elaborate stories about how it could be wrong; but it’s really reaching. It seems safe to say that what we have here is a case in which rival theories made different predictions, the predictions of one theory proved completely wrong while those of the other were totally vindicated — but in which adherents of the failed theory, for political and ideological reasons, refuse to accept the facts.

http://krugman.blogs.nytimes.com/2013/02/23/austerity-europe-2/