A Greek Morality Tale
When the euro crisis began a half-decade ago, Keynesian economists predicted that the austerity that was being imposed on Greece and the other crisis countries would fail. It would stifle growth and increase unemployment - and even fail to decrease the debt-to-GDP ratio. Others - in the European Commission, the European Central Bank, and a few universities - talked of expansionary contractions. But even the International Monetary Fund argued that contractions, such as cutbacks in government spending, were just that - contractionary.