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Tyler Cowen excerpts a Paul Krugman piece:

…this [Barro’s paper] tells us very little about what would happen under current conditions: during World War II there, um, was a war on: consumption goods were rationed, construction required special permits, and so on. The government was, in other words, deliberately suppressing private spending, through direct controls. So WWII is not a useful data point for determining what the multiplier is under other conditions.

His post was about multipliers and the implications for when monetary policy might have some traction. My point is rather different. If, as Krugman admits here, the federal government was deliberately suppressing private spending, and if what we care about is the well being of citizens, how can he then argue with a straight face that World War II ended the Great Depression?

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