Krugman, DeLong’s Keynes Model Flawed, Ferguson Says: Tom Keene

The economic assumptions of Paul Krugman and Bradford DeLong are based on “flawed” versions of John Maynard Keynes’s model, according to Niall Ferguson, a history professor at Harvard University.

“They have a flawed Keynesian model in their minds about what fiscal stimulus can do when you already have a highly indebted economy,” Ferguson said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. “We’ve seen this movie in Japan before where you end up with an explosion of public debt but a flatlining economy, and gradually that debt burden, even at low interest rates, begins to be more of a burden than a source of stimulus.”