{"id":4765,"date":"2012-05-21T11:18:12","date_gmt":"2012-05-21T15:18:12","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=4765"},"modified":"2012-05-21T11:22:32","modified_gmt":"2012-05-21T15:22:32","slug":"a-new-frontier-of-economic-nonsense","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/a-new-frontier-of-economic-nonsense\/","title":{"rendered":"“A New Frontier of Economic Nonsense”"},"content":{"rendered":"

In an interview with Helen Artopoulou that was posted on Capital.gr<\/a>, Levy Institute president Dimitri Papadimitriou discusses the failure of the austerity policies imposed on Greece and the uncertain future of the euro project.<\/p>\n

Q.<\/strong>\u00a0The political impasse in Greece, largely the outcome of the recent elections, had led to some reconsideration of the austerity policy measures being currently implemented in the indebted countries of the Eurozone. In fact, it seems that a number of public officials have shifted their position, calling now for a growth-oriented economic policy. Given the reality of Greece, how easy is to stir economic growth, and why didn\u2019t the EU follow the growth path to economic recovery in the first place but relied instead on fiscal consolidation and draconian austerity measures?<\/p>\n

Economic growth is dependent on public policy aiming at deploying the resources available, that is, labor and capital. Presently, in Greece, there is an abundance of labor, but no capital from either the private or public sectors. It will be some time before the economy becomes friendlier to private investment, markets offering increasing liquidity, and for the private sector to gain confidence in the country\u2019s economic stability. The time horizon for these things to happen will be long so, the responsibility falls on the public sector to do the investing in the key sectors of the Greek economy. But the public sector is on the brink or bankrupt, and in effect restricted by the EU, ECB and IMF in investing for growth. When they call for a growth-oriented economic policy in response to the overwhelming election results in favor of the anti-austerity platform, they simultaneously insist on the implementation of the imposed austerity. This joint policy prescription, that growth and austerity can coexist, is the new \u201causterian\u201d economics\u2014a new frontier of economic nonsense.\u00a0North European leaders believe that all member states in the Eurozone can be similar to Germany\u2019s competitive export-led growth economy. But Germany\u2019s competitive advantages that yield intra Eurozone better trade balances are dependent on other Eurozone\u2019s countries worse balances. <\/strong><\/p>\n

Austerity programs were imposed, first, to discipline the eurozone\u2019s profligate citizens and, second and most importantly to calm the financial markets, both of which have failed miserably. The medicine of austerity has worsened the patient\u2019s condition and markets, as has been observed time and time again, have a mind of their own.<\/strong><\/p>\n

Q.<\/strong> Greece is facing once again the prospect of a forceful exit from the eurozone. How likely is this frightening scenario and is it manageable? Also, would it be as disastrous for the country as most people fear it would be?<\/p>\n

Read the whole thing here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

In an interview with Helen Artopoulou that was posted on Capital.gr, Levy Institute president Dimitri Papadimitriou discusses the failure of the austerity policies imposed on Greece and the uncertain future of the euro project. Q.\u00a0The political impasse in Greece, largely the outcome of the recent elections, had led to some reconsideration of the austerity policy […]<\/p>\n","protected":false},"author":202,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[141,21,213,31,94,19,267],"class_list":["post-4765","post","type-post","status-publish","format-standard","hentry","category-eurozone-crisis","tag-austerity","tag-bailout","tag-eu","tag-eurozone","tag-germany","tag-greece","tag-papadimitriou"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/4765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/202"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=4765"}],"version-history":[{"count":10,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/4765\/revisions"}],"predecessor-version":[{"id":4772,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/4765\/revisions\/4772"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=4765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=4765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=4765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}