Advertisement

Debating the Confidence Fairy

  • Robert SkidelskyEmail author
  • Nicolò Fraccaroli
Chapter

Abstract

In 2011, the Nobel laureate economist Paul Krugman characterized conservative discourse on budget deficits in terms of “bond vigilantes” and the “confidence fairy.” Unless governments cut their deficits, the bond vigilantes will put the screws to them by forcing up interest rates. But if they do cut, the confidence fairy will reward them by stimulating private spending more than the cuts depress it.

Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.University of WarwickCoventryUK
  2. 2.London School of Economics and Political ScienceLondonUK

Personalised recommendations