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Krugman becomes Irisheconomy.ie fan!

Comments

  • #2
    [Deleted User]
    Posts: 5,589 ✭✭✭ [Deleted User]


    But it seems the commenters on irisheconomy.ie aren't fans of Krugman!


  • #3
    Flamed Diving
    Closed Accounts Posts: 6,609 ✭✭✭Flamed Diving


    Deleted User wrote: »
    But it seems the commenters on irisheconomy.ie aren't fans of Krugman!

    I think some of the commenters are misinterpreting what he said. I don't think that Krugman is suggesting that we should be seeking to expand, at this time, I'm sure he knows very well that we can't. As a Keynesian, he is merely concerned about the pro-recessionary effect that cuts in spending can have, and he obviously thinks that the Govt are pushing this to the limit, beyond which we would simply be crippling our economy.


  • #4
    nesf
    Registered Users, Registered Users 2 Posts: 27,644 ✭✭✭✭nesf


    Flamed Diving wrote: »
    I think some of the commenters are misinterpreting what he said. I don't think that Krugman is suggesting that we should be seeking to expand, at this time, I'm sure he knows very well that we can't. As a Keynesian, he is merely concerned about the pro-recessionary effect that cuts in spending can have, and he obviously thinks that the Govt are pushing this to the limit, beyond which we would simply be crippling our economy.

    Yeah, my reading of his piece was that he was pointing to Ireland as an example of how you can end up in a situation where no stimulus is possible despite (from a Keynesian point of view) the country needing it due to fiscal constraints. Also note his pointing out of the "special position" the US is in with respect to the bond markets and how this might not be a permanent state of affairs.


  • #5
    eamonnm79
    Closed Accounts Posts: 459 ✭✭eamonnm79


    nesf wrote: »
    Yeah, my reading of his piece was that he was pointing to Ireland as an example of how you can end up in a situation where no stimulus is possible despite (from a Keynesian point of view) the country needing it due to fiscal constraints. Also note his pointing out of the "special position" the US is in with respect to the bond markets and how this might not be a permanent state of affairs.

    He knows America can get away with printing money longer than any other country. Will the Chinese eventually Call their bluff and in so doing become the worlds No. one super power? I dont think this day is far away.

    MY gut tells me that when country A spends way more than they have for a long time and gets involved with many wars and country B saves very regularly and has large actual growth over a long time eventually there is going to be a tipping point.
    I heard a CEO of a chinese company on Bloomberg say today that "the world is not ready for China to be a great power". I thought it was intresting.


  • #6
    Flamed Diving
    Closed Accounts Posts: 6,609 ✭✭✭Flamed Diving


    eamonnm79 wrote: »
    He knows America can get away with printing money longer than any other country. Will the Chinese eventually Call their bluff and in so doing become the worlds No. one super power? I dont think this day is far away.

    MY gut tells me that when country A spends way more than they have for a long time and gets involved with many wars and country B saves very regularly and has large actual growth over a long time eventually there is going to be a tipping point.
    I heard a CEO of a chinese company on Bloomberg say today that "the world is not ready for China to be a great power". I thought it was intresting.

    China is a long, long way from becoming a superpower. Most of their growth has come from the fact that they are involved in low-tech, low-skilled, low-pay manufacturing. History has shown (Soviet Union, Japan) that this strategy soon runs out of steam, due to diminishing returns. In addition, most of China's population is still rural, uneducated and living in poverty, so they not even close to moving beyond the industrial stage. Furthermore, if things went as you described, with country usA spending more than it has and failing, who will the USA be defaulting to? Where are they borrowing the money from? Who has the most T-Bills in reserve?


    If the US are to fail, then everyone is going down with them.


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