The International Monetary Fund (IMF) has issued an audit that basically acknowledges it screwed up by believing in austerity policies. Paul Krugman noticed. Now if we could get Senator Kelly Ayotte and the Republicans to notice too. Nah. They live on a different planet. The IMF has released an audit of its own response during the aftermath of the financial crisis, which concludes that it messed up by embracing fiscal austerity in 2010. It failed to understand that you need to differentiate between economies that borrow in someone else’s currency and those that don’t; it failed to appreciate that the negative effects of fiscal contraction would be much larger in a zero-lower-bound environment than historical patterns might suggest. Well, I could have told you all of that at the time — and in fact I did, over and over again. But let us nonetheless celebrate the IMF’s willingness to look honestly at its own record and learn from it. Taking responsibility for your actions and statements — being a mensch, as my father would have said — is all too rare in modern economic discourse, as the comedic evasions of the open-letter crew demonstrate. The Fund, it turns out, is better than that, and deserves praise. ieo-imf.org/ieo/pages/CompletedEvaluation227.aspx
Posted on: Wed, 05 Nov 2014 14:23:05 +0000
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