I support the Krugman-Layard Manifesto and urge others to do so.
Krugman and Layard in today's Financial Times suggest that
As a result of their mistaken ideas, many western policy makers are inflicting massive suffering on their peoples. But the ideas they espouse about how to handle recessions were rejected by nearly all economists after the disasters of the 1930s. It is tragic that in recent years the old ideas have again taken root.
With the crisis well into its fourth year, Scottish GDP remains 4 percent below its pre-recession peak, employment is 3 percent below, the ratio of employment to working population is nearly 6 per cent below, and unemployment at 8.2 percent is significantly above the pre-recession peak of 3.9 per cent and the 5 to 6 percent range that economists believe is associated with stable inflation.
Fiscal austerity isn't working. The evidence is overwhelmingly against it producing an expansionary effect on GDP. It is making the crisis worse.
Sign the manifesto here.
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