The FT writes:
The great austerity debate: Over the next week some of the world’s leading policymakers and economists will be addressing in the FT the all-consuming contemporary economic debate: austerity versus stimulus. The writers, including Larry Summers, Jean-Claude Trichet and the FT’s Martin Wolf will argue whether cutting now risks suffocating the fragile recovery of the global economy. This page allows you to see the highlights from each contribution and join the discussion in the comment box at the end of this page. You can also click through to read each piece as a whole and comment on that specific contribution.
Martin Wolf, FT’s chief economic commentator
The interaction of high indebtedness with deflation could create a cumulative downward spiral. A Japanese-style “lost decade” threatens the developed world. That is particularly likely if everybody starts to tighten together. If anything, further loosening is needed: in the first quarter of 2010, the gross domestic product of every member of the group of seven leading high-income countries was still below its pre-crisis peak. Readers must make up their own minds on the merits of the arguments this week. My own strong sympathies are with the postponers. But of one thing everybody agrees: this debate matters. We cannot be sure who is right. But we can be sure that if policy-makers get it wrong, the results may well be dire.
Keep reading Martin Wolf, Why the battle is joined over tightening
Lawrence Summers, director of President Barack Obama’s National Economic Council
Economic commentators are mired in an unhelpful dialectic between “jobs” and “deficits” that, despite its apparent simplicity, has obscured rather than clarified the policy choices ahead in the US, Europe and elsewhere. Critics have complained that President Barack Obama’s continued commitment both to support recovery in the short term and to reduce deficits in the medium and long term constitutes a “mixed message”. In fact, it is the only sensible course in an economy facing the twin challenges of an immediate shortage of demand and a fiscal path in need of correction to become sustainable.
Keep reading Lawrence Summers, America’s sensible stance on the recovery
Next in the series: Niall Ferguson and Brad DeLong