John Stewart Mill vs. the European Central Bank
When demand for government bonds is high, as it is nowadays, governments should increase the supply. That lesson, bequeathed to us by John Stewart Mill, is one that the core economies of the global North, as well as the European Central Bank, do not seem to have learned.
BERKELEY – One of the dirty secrets of economics is that there is no such thing as “economic theory.” There is simply no set of bedrock principles on which one can base calculations that illuminate real-world economic outcomes. We should bear in mind this constraint on economic knowledge as the global drive for fiscal austerity shifts into top gear.