Friday, May 27, 2011

Deficit reductions and inward shifting AD in the UK

Here is a good analysis of why reducing a deficit is not a good economic stimulus plan.  The UK is in trouble because of its deficit reduction/austerity plans.  You reduce deficits when AD is growing not when it is already declining. 
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5 comments:

  1. Chris DendrinosMay 27, 2011 at 7:48 AM

    Poor economic planning at work.

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  2. Laura KochMay 27, 2011 at 9:48 AM

    Thanks Dr. M for satisfying my AD kick of the week.

    The debt addicted areas of the UK are "real estate, finance, health, education,construction and public administration." This does not seem to stray to far from the US's current situation. Both countries could benefit from restructuring.

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  3. Dane CareyMay 27, 2011 at 11:25 AM

    This comment has been removed by the author.

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  4. Dane CareyMay 27, 2011 at 11:26 AM

    Okay, Richard posted his article at 6:35am, and HC posted this one at 3:58am...was there a party last night or what?!?

    check out this video, for your next late night endeavors:

    http://www.youtube.com/watch?v=CuCxLjZQJqs&feature=related

    ReplyDelete
  5. MattMay 29, 2011 at 2:32 PM

    Interesting analysis. Clearly restructing is of the utmost importance at this point.

    ReplyDelete

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