Tag Archives: Europe

If Austerity is Working, What Does Failure Look Like?

From Paul Krugman

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Historical Hysteresis: Adverse Shocks vs Structural Problems

I started posting last week on the Summers & Blanchard paper, which is on hysteresis and the Unemployment problem in Europe starting in the mid 1970s. Many advocated structural explanations for hysteresis, but Summers & Blanchard looked to the Great Depression period … Continue reading

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Hysteresis & the Unemployment Problem

Summers and Blanchard have a paper on Hysteresis in Europe in the 1980s in which they discuss three main potential causes of hysteresis, which is a very high dependence of current employment on past unemployment. The three causes are (1) physical … Continue reading

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Output Spillovers from Fiscal Policy

From Alan Auerbach and Yuriy Gorodnichenko:  It’s tough out there for policymakers seeking to stabilize economies, and shocks from abroad aren’t helping. This column argues that for countries hit by recession, fiscal stimulus in another country might significantly stimulate demand … Continue reading

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Bernanke on The Economic Recovery and Economic Policy

He concludes the speech: In sum, the U.S. economy continues to be hampered by the lingering effects of the financial crisis on its productive potential and by a number of headwinds that have hindered the normal cyclical adjustment of the … Continue reading

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