Nightttime Must-Read: Simon Wren-Lewis: Jeffrey Sachs and the Age of Diminished Expectations

…telling me that US growth disproves the idea that austerity is bad for you at the Zero Lower Bound (ZLB). Jeffrey Sachs just joins a long list…. With recent US experience, there is no case against Keynesian analysis to answer. This suggests to me two things. First, lots of people are desperate to show that critics of austerity at the ZLB are wrong, and are prepared to make nonsense arguments to that end. This may be particularly true if you very publicly proclaimed the need for austerity in 2010…. Second, it is a sad day when anyone thinks that 2.3% growth is ‘brisk’ when we are recovering from a deep recession and interest rates have remained at the ZLB. It is so very dangerous when these diminished expectations become internalised by the elite…