This is the final draft section of the new chapter of my Zombie Economics book, on Expansionary Austerity.
As before comments are welcome. That includes everything from typos and suggestions for better phrasing to substantive critiques of the argument. If I can get organized, I will try to post the edited version of the entire chapter and invite another round of comments.
As an aside, I just got an email link to the Journal of Economic Literature (behind a login screen), which contains Stephen Williamson’s review of my book, including his claims that both the Efficient Markets Hypothesis and DSGE macro are devoid of any implications. I bet that if I had submitted an article to any publication of the American Economic Association making such claims, it would have been shot down in flames by the referees. But, now it’s been published – anyone keen on a radical critique of mainstream economics can now cite the JEL to the effect that the whole enterprise (at least as applied to finance and macroeconomics) is irrelevant to reality.