Re: Niall Ferguson in the FT

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(email exchange)

They’ve all forgotten imports are a real benefit, exports a real cost, so they are afraid that imports will go up if you make a fiscal adjustment unilaterally.

In fact, it’s the best of all worlds to do it unilaterally and let the imports flood in.

To paraphrase Nixon (?):

‘They are all half baked Keynesians now’.

>   On Mon, Feb 2, 2009 at 9:53 PM, MAuer wrote:
>   Any thoughts on this?
>   Subject: Niall Ferguson in the FT
>   Today’s born-again Keynesians seem to have forgotten that their prescription
>   of a deficit-financed fiscal stimulus stood the best chance of working in a more
>   or less closed economy. But this is a globalised world, where uncoordinated
>   profligacy by national governments is more likely to generate bond market
>   and currency market volatility than a return to growth.