Yale Economist Robert Shiller says the focus on austerity by governments around the world is similar to what happened late in the Great Depression — and he says such a focus is part of why the Depression lasted as long as it did. “It doesn’t bode well,” Shiller tells Morgan Housel of The Motley Fool in discussing the current climate of austerity. “What we really need to do is to have stimulus, and we have to have New Deal-type innovations that will get the economy going, and we’re not really doing that.” While critics point to continuing high unemployment and tepid growth as signs that previous stimulus plans and bailouts haven’t worked, Shiller thinks otherwise. “We could’ve been in a much worse situation” without those efforts, he says.
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