austerity (Photo credit: 401(K) 2013)

In his latest blog, Oxford economist, Simon Wren-Lewis, takes a hard look at the latest research evidence into the cost of austerity in Europe. The article plus the underlying research paper are STRONGLY RECOMMENDED if you are looking for hard data on the impact of austerity policies.

via The ‘official’ cost of austerity Simon Wren-Lewis – Mainly Macro.

For the busy reader, let me cite Wren-Lewis’ overview:

That means that over 3 years nearly 10% of Eurozone GDP has been needlessly lost through mistakes in policy. This is not the wild claim of a mad macroeconomist, but what simple analysis backed up by mainstream models tell us.

Wren Lewis also looks at the impact on the UK, based upon OBR data but alludes to the risk that the OBR data may be under-stating the consequences for the UK.

Let me turn this to an open question:

Why are Europe’s political leaders and he mainstream media in such a hurry to whitewash the impact of austerity in Europe?

Any thoughts?

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