Which part has been wrong, exactly? Who created the mess? As far as I can see, a lot of things have been wrong, but a lot of things have been learned as a result. While I have my pet peeves, I do believe that even a science as dismal as economics proceeds in small incremental steps.
Old/New Keynesian thinking, inflation targeting, anything targeting that has flowed out of the halls of academia and brain dead policy makers for the last 3 decades. I don't buy the incremental steps idea because correct/sound thinking was available through the Austrian school a long time ago. Had they listened, they wouldn't have made a step, but rather a leap forward. Let me guess, you see the global economic situation as "far from perfect", right?
I don't have a view on the global economic situation. I don't pass judgement on big picture stuff like that. As far as I am concerned, it is what it is. As to the Austrian school, surely you have to appreciate that their approach has all sorts of issues. On some particular subjects, I find their thinking as far from "correct/sound" as one could imagine. So it's hardly going to provide all the answers, IMHO.
I guess japan is a very arguable position right now. Just today, they have released the stimulus of $274 billion. This is one of the largest stimuli since the global financial crisis. Will it help though???
Well, you can ignore the elephant hiding under the rug if you'd like. Japan is passed out on the floor, and Dr Keynes is pumping (more) heroin into its arm faster than a hooker on a Saturday night. China is trying its best to look alive when it's a walking debt zombie. Eurozone is eurosclerotic. They all have one thing in common: old/new Keynesian policy makers and monetarism. Japan was the first to embrace the logical end of this idiocy and now they are dealing with the end game of it. How so, in your view, is the Austrian school "far from sound"?
Firstly, to confirm, I think the Austrian approach to economics offers some important and useful contributions. That said, from what I know, Austrians have big issues with what I perceive to be the tricky parts of capitalism. Specifically, the issues of public goods/externalities and monopolies. Also, I find their rejection of the use of econometrics and, more broadly, mathematics to be rather silly.
Thank you, Maverick1. I have read the news as well. The stimulus program will involve investing in infrastructure projects, such as magnetic levitation train line between Tokyo and Osaka. Additionally, it will provide the resources for cash handouts of ¥15,000 each to 22 million low-income people.The reconstruction projects spending in a southern region which was damaged by the earthquakes in April are also going to be covered by this program.
Hi James, The point of the article was to show that Keynesian type spending doesn't work when common sense reforms are ignored. The failure of Japan's prior 26 fiscal packages is staggering...
Totally agree with you. The actual size of packages in comparison to promised ones is also impressing