Monday 13 June 2011

Government Is More to Blame for Weak Recovery Than Fading Stimulus: Echoes

http://www.bloomberg.com/news/2011-06-09/government-is-more-to-blame-for-weak-recovery-than-fading-stimulus-echoes.html

With no empirical evidence connecting the weak recovery to a fading-out of stimulus, Krugman appeals to history, and the year 1937 in particular. After three years of strong economic recovery, with real gross-domestic-product growth of more than 10 percent per year, the U.S. economy slowed and went into a recession in 1937 and 1938. Krugman says it was a "fiscal and monetary pullback that aborted an ongoing economic recovery" and that the same thing is happening in the U.S. today.

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