10-10-2012, 12:14 AM
Krugman's comment about the "anti-stimulus" and its resulting drag on Europe is interesting. I am certainly no economist, but my guess is the "multiplier" is not a constant but yet another multivariate relationship whose principle response is a function of where the stimulus goes and to what extent there exists unused and unrestricted productive resources in the target.
Taking that back a bit to the massive credit expansion in southern Europe (Greece et al) following the birth of the Euro suggests that expansion to have been a major contributor to the bubble/collapse we saw prior to 2009. Too much can be just as harmful as too little. It certainly appears though the Fed and Obama have pushed in the right direction since late 2008.
Thanks for the thread.
Taking that back a bit to the massive credit expansion in southern Europe (Greece et al) following the birth of the Euro suggests that expansion to have been a major contributor to the bubble/collapse we saw prior to 2009. Too much can be just as harmful as too little. It certainly appears though the Fed and Obama have pushed in the right direction since late 2008.
Thanks for the thread.