Can we spend our way out of a recession?
January 16, 2009 at 1:30 am by Wayne GarciaObama thinks so. And one economist is arguing that Japan’s experience proves it. From my Recessionomics column this week:
Let’s see what Richard C. Koo, the author of The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession and chief economist for the Nomura Research Institute in Tokyo, has to say about such things. (OK, yes, the Taiwanese national is also a U.S. citizen who has done quite a bit of work here in the states and was with the Federal Reserve Bank of New York, but still …)
Koo’s book examines how Japan fixed its economy in the 1990s, when its condition was similar to what the rest of the world is experiencing today. His solution, as boiled down by a writer for Canada’s The Globe and Mail: “Spend, spend big, spend till it hurts and when you are tired of spending, spend some more.”
Read the rest here.
