Why it’s hurting but not working

broken-toolsOne of our favourite economists at English Economic (yes, one or two are all right) is Oxford University’s Simon Wren-Lewis. Simon has been one of the most trenchant critics of Britain’s Tory government within mainstream economics, and his clear and straightforward arguments generally go unanswered by government supporters. Simon is also one of the few academic economists to make a concerted effort to reach out to non-economists, both through his Mainly Macro blog (which caters for both economists and the rest of us) and his campaign against “media macro” – the distortion and misinformation in the mainstream media which does so much to promote right-wing economic ideas and always seems to favour the interests of the rich and powerful.

One of the most important questions Simon has been tackling recently is why all the extraordinary measures taken in the UK and the Eurozone in recent years have failed to get the economy moving. Put very simply, there are two ways for the authorities to stimulate the economy quickly (in what economists call the “short-run”), so we can see some economic growth and start getting pay rises again. The government can either spend money itself or it can encourage other people to spend money. Either way, someone somewhere has to start putting some money down.

Read the full article on English Economic.

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