Posts Tagged ‘expansionary austerity’

Jamaica, model of ‘expansionary austerity’


There is that island in the sun. But, first, a journey through turquoise waters of another tourist destination.

There we find a set of islands that comprise Greece. That country, a member of the ‘periphery’ (word of profound meaning), continues to experience its massive economic, social and emotional) Depression unleashed since 2007, in which Greek policies were not entirely blameless.

As member of the eurozone with the euro as its currency, Greece has had limited to nil options available with regard to monetary policy to deal with the economic catastrophe. Aside the fact that the country was integrated into the union with the feverish ‘connivance’ of now very ‘aggrieved’ parties. Lacking its sovereign currency, Greece could not resort to devaluation as a tool of monetary policy that might have allowed more flexibility, and minimised, or rather contained, the severity of the damage to the economy and the concomitant exacerbation of the country’s debt.  Paul Krugman, Simon Wren-Lewis, and others have also touched on this option, albeit unavailable, at the moment. (more…)