OK, let’s be clear: I’m in favor of structural reform (as long as it’s the right kind of reform). I’m also in favor of peace, kindness, and good coffee for everyone.
But when I see influential people calling for structural reform as the universal answer to all economic problems, I get angry.
OECD is definitely one of the bad guys of this crisis. Back in 2010, it not only enthusiastically endorsed fiscal austerity, it demanded sharply higher interest rates too.
When austerity and inadequate monetary stimulus led Europe to an economic performance now in line with that of the 1930s, the OECDwarned vociferously against any change in course.
Now, with growth terrible and disinflation-heading-toward-deflation a real threat — largely thanks to the tight fiscal and inadequate monetary policies the OECD cheered on — the OECD warns that things don’t look good. And the answer is … structural reform!