Louis Uchitelle. “Economists Warm to Government Spending but Debate Its Form”. New York Times. January 6, 2009 – Hundreds of economists who gathered here for the annual meeting of the American Economic Association seemed to acknowledge that a profound shift had occurred.
At their last annual meeting, ideas about using public spending as a way to get out of a recession or about government taking a role to enhance a market system were relegated to progressives. The mainstream was skeptical or downright hostile to such suggestions. This time, virtually everyone voiced their support, returning to a way of thinking that had gone out of fashion in the 1970s.
“The new enthusiasm for fiscal stimulus, and particularly government spending, represents a huge evolution in mainstream thinking,” said Janet Yellen, president of the Federal Reserve Bank of San Francisco. She added that the shift was likely to last for as long as the profession is dominated by men and women living through this downturn.