Wednesday, January 07, 2015
History of the world economy since 2008 in one chart
Posted by Christopher Moore
The graph above, from Paul Krugman, is pretty clean and simple. It covers 33 countries (unspecified, but the data is from Eurostat, so Canadian inclusion or exclusion not clear to me) for the four years covered, giving a total of 132 dots.The cluster toward top and right are countries with years in which there was increasing government spending and increases in GDP. Dots toward bottom left come from countries with reductions in government spending and declining GDP.
Essentially it graphs the global failure of conservative macroeconomic policy since the crash of 2008. Countries that practised austerity doctrine -- cut public spending, balance the budget, lower taxes, fear debt and deficit above all -- have done badly in GDP growth. Countries where governments took up the economic slack by public spending have done well.
Canada's principal economic boasts of recent years? Reducing the deficit. And tax cuts.