18th October 2010
Thanks to Mehdi Hasan of the New Statesman who made reference to the paper by Professor Victoria Chick and myself, ‘The Economic Consequences of Mr Osborne‘ in his article ‘Ed Miliband must not be defined by his enemies‘ earlier this week.
Hasan questions the willingness of some inside the labour party to “indulge Osborne and co by denying they are ‘defecit deniers'”. He goes on to say:
“This is the message Labour must promote: cutting spending is not the same as cutting the deficit. The new shadow chancellor, Alan Johnson, has joked that he plans to buy an economics primer to prepare for his new post. I have a better suggestion for him: reread Balls’s speech. Or alternatively go online and download a research paper entitled “The Economic Consequences of Mr Osborne”, co-authored by Victoria Chick, emeritus professor of economics at University College London, and Ann Pettifor, one of the few British economists who can credibly claim to have predicted the crash. Having studied the data from 1918 to 2009, they conclude: “The empirical evidence runs exactly counter to conventional thinking. Fiscal consolidations have not improved the public finances . . . Consolidation increases, rather than reduces, the level of public debt as a share of GDP and is, in general, associated with adverse macroeconomic conditions.”