The IMF says they were wrong, and that they underestimated how much of a drag on growth austerity policies (tax increases and spending cuts) would be.
So when will we get an apology from the Republicans for insisting on deficit reduction the past 4 years?
The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth. That it comes under the byline of fund economic counselor and research director Olivier Blanchard is significant. Fund research is always published with the caveat that it represents the views of the researcher, not the institution itself. But this paper comes from the top, and attempts to put to rest an issue that has been at the center of debate about how fast countries should move in their efforts to tame large debts and deficits.