Monday, November 24, 2008

Are We All Keynesians Now?

Amid the unfolding global financial crisis, countries across the world are fast in deciding pump-priming is the way to go in engineering a recovery of their economies.

If my memory serves me right, about a decade ago, economists, especially those from the IMF and the US Treasury were asking all those troubled economies afflicted by the Asian financial crisis to keep their fiscal house in order before they could gain access to any emergency aid from the IMF or the US(?).

Now, the same economists, (I am assuming here that the economists at US Treasury or IMF who are advising the US government say were either the same ones or have recieved very similar training to those who doled out the advice to leaders of Asian economies ten years ago) are now advocating their governments to spend their way out of the problem.

What has caused this shift in mentality?

Hypocrisy anyone?

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