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A small miracle happened: all economists agree with each other.
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#economie You may have missed it, but there has been a small miracle in recent weeks: all economists agree.
What no one thought possible happened because of the virus outbreak. There is agreement on the necessary economic policy. Ask ten economists a question about the corona crisis, and you get the same answer ten times: the government must now make every effort to support the economy, the deficit and debt can increase considerably, and the central bank must open up the locks.
It was precisely these subjects on which the economy had ended up in a permanent civil war. Should we make cuts because otherwise the debt will become untenable or, on the contrary, encourage us to avoid ending up in a Japanese deflation spiral? Should the ECB continue to drive inflation, or is monetary policy far too broad? It was a battle to the death, but with today's corona knowledge, it seems nothing more than a scholastic pastime for bored professors.
Peace in economics, how does the virus get it done? I think it's because we have a unique economic problem. The government is deliberately squeezing the economy, and it is now important that this does not cause permanent damage.
“The DJ suddenly turned off the music. Soon, 'it will turn on again, but how do we keep the mood in the meantime? '
Or to use a more cheerful comparison: the party was well on the move and the dance floor was full of dancing people, when the DJ suddenly turned off the music. Soon it will turn on again, but how do we keep the mood in the meantime? 'Clap your hands! ' , the economists call in choir. 'And stomp your feet! Dance to your own rhythm! ' Someday the DJ will play again, and then the dance floor has to be full.
Could we not have done that in the credit crisis? Then the party was suddenly over. But from such a financial crisis you do not know how long it lasts and whether the downturn is not a necessary return to more normal times. One group of economists shouts: 'Turn the music louder, spin even faster beats, everyone will dance again. ' While other economists say, “The music was way too loud, the dancers have squeaky ears. Time to clean up the garlands. “
This current crisis is not caused by the economy. They are not greedy investors, miserable banks or dollar-hungry oil sheiks that are causing the misery. There are therefore no points to score for one or the other economic dogma, or to win a battle in one or the other quarrelsome. All economics can be in the same direction.
What no one thought possible happened because of the virus outbreak. There is agreement on the necessary economic policy. Ask ten economists a question about the corona crisis, and you get the same answer ten times: the government must now make every effort to support the economy, the deficit and debt can increase considerably, and the central bank must open up the locks.
It was precisely these subjects on which the economy had ended up in a permanent civil war. Should we make cuts because otherwise the debt will become untenable or, on the contrary, encourage us to avoid ending up in a Japanese deflation spiral? Should the ECB continue to drive inflation, or is monetary policy far too broad? It was a battle to the death, but with today's corona knowledge, it seems nothing more than a scholastic pastime for bored professors.
Peace in economics, how does the virus get it done? I think it's because we have a unique economic problem. The government is deliberately squeezing the economy, and it is now important that this does not cause permanent damage.
“The DJ suddenly turned off the music. Soon, 'it will turn on again, but how do we keep the mood in the meantime? '
Or to use a more cheerful comparison: the party was well on the move and the dance floor was full of dancing people, when the DJ suddenly turned off the music. Soon it will turn on again, but how do we keep the mood in the meantime? 'Clap your hands! ' , the economists call in choir. 'And stomp your feet! Dance to your own rhythm! ' Someday the DJ will play again, and then the dance floor has to be full.
Could we not have done that in the credit crisis? Then the party was suddenly over. But from such a financial crisis you do not know how long it lasts and whether the downturn is not a necessary return to more normal times. One group of economists shouts: 'Turn the music louder, spin even faster beats, everyone will dance again. ' While other economists say, “The music was way too loud, the dancers have squeaky ears. Time to clean up the garlands. “
This current crisis is not caused by the economy. They are not greedy investors, miserable banks or dollar-hungry oil sheiks that are causing the misery. There are therefore no points to score for one or the other economic dogma, or to win a battle in one or the other quarrelsome. All economics can be in the same direction.
Source:Mathijs Bouman
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