IMF admits disaster in Austerity orders

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Submitted by patb on January 6, 2013 - 3:15pm

Blanchard and Leigh deduced that IMF forecasters have been using a uniform multiplier of 0.5, when in fact the circumstances of the European economy made the multiplier as much as 1.5, meaning that a $1 government spending cut would cost $1.50 in lost output.

the IMF knew this, they just sell the idea to force down asset prices to go in
and raid cheap assets.

Submitted by no_such_reality on January 7, 2013 - 9:30am.

They didn't admit disaster.

When you take away the stimulants, things adjust.

It also seems to be complete common sense that if you take away a $1 of deficit spending that you'd lose more than a dollar of economic output. You're starting with a $1 of vapor money. That's $1 in economic output just on the deficit spending. Add the incremental trickle down and get a $1.50.

So is Greece better off today or would they have been better off keeping on the path they were on?

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