The economist Kenneth Rogoff has defended British officials' embrace of austerity following the global financial crisis, using historical cases to demonstrate that the UK’s credit performance has been far from credible. But investors look past a country’s previous failures if its current institutions and economic policies are sound.
LONDON – Was the British government’s decision to embrace austerity in the wake of the global financial crisis the right policy, after all? Yes, claims the economist Kenneth Rogoff in a much-discussed recent commentary. Rogoff argues that while, in hindsight, the government should have borrowed more, at the time there was a real danger that Britain would go the way of Greece. So Chancellor of the Exchequer George Osborne turns out, on this view, to be a hero of global finance.
LONDON – Was the British government’s decision to embrace austerity in the wake of the global financial crisis the right policy, after all? Yes, claims the economist Kenneth Rogoff in a much-discussed recent commentary. Rogoff argues that while, in hindsight, the government should have borrowed more, at the time there was a real danger that Britain would go the way of Greece. So Chancellor of the Exchequer George Osborne turns out, on this view, to be a hero of global finance.