Have things gone full circle? Since the ‘Great recession’ hit in 2007 governments worldwide first attempted Keynesian measures (increasing govt spending to raise growth). Then when that didn’t do what they had hoped, they reverted to a more classical thought of letting the economy work itself out, and decrease govt debt (austerity, regulations etc). Now Larry Summers* argues in an opinion for the Washington Post that we need to give the Keynesian policies another crack.
*Lawrence Summers is a professor and past president at Harvard. He was Treasury secretary from 1999 to 2001 and economic adviser to President Obama from 2009 through 2010.