Free exchange | Paul Krugman at Oxford

A chin-stroker

Paul Krugman's latest rant at Oxford University tells you more about him than about Britain's economic policy

By C.W. | OXFORD

“IT IS CLEAR that [in elections] voters respond much more to short-term growth than to long-term growth”. In other words, an incumbent government is very likely to be re-elected if in recent months the economy has been improving. Paul Krugman, who is spending some time at Oxford University, mused on this finding (which has broad support amongst political scientists) at a lecture yesterday. Mr Krugman delivered a familiar (and not terribly well-prepared) speech on the perils of British austerity.

Mr Krugman made an interesting, if somewhat conspiratorial, point. He argued that the British government’s economic policy between 2010 and 2012 was completely destructive. Indeed, as we have argued before, the British economy is still lagging behind its pre-crisis trend. He then pointed out that things started to get better around 2013—thanks in no small part to an easing of austerity. Growth only really got going at the end of 2014—as the election loomed.

Mr Krugman thus implied that the British government—deliberately or mistakenly—had engineered measly growth at the beginning of its term, thus making it easier for the economy to roar back as the election approached. That would seem to ascribe to the coalition an unrealistic level of strategic wizardry and general deviousness, beyond even that possessed by the chancellor of the exchequer, George Osborne. Though interesting, it may say more about Mr Krugman than the British government.

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