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Krugman: Canadian Austerity Zombie

April 3, 2013

This past Sunday (sorry for my slowness) Paul Krugman zombied again:

Ladies and gentlemen, let me present the Canadian austerity zombie.

In “The ECB and the Austerity Trap” explains how Canada in the 1990s was able experience “expansionary austerity” but

Canada was able to offset its fiscal contraction with a dramatic loosening of monetary policy … [but] … right now, with policy interest rates near zero, nothing like this can happen. The contractionary effect of austerity is unmitigated.

See more Canada Zombie and see zombie facts

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From → economics

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