Philippe Legrain, incompetent economists on the Syndicate

Philippe Legrain Says:

On the contrary, its recovery coincided with the easing of the extreme austerity imposed in 2011-13, which has encouraged households to spend more, despite stagnant wages.

Here we have Euro area inflation, and we see it rising from 2010 and finally reverting to 1% on or about 2013.  That is not austerity, that is inflation. and What does inflation cause?

High interest rates on the ten year bond.   The inflation was caused by high Brent oil prices. That raised the ten  year rate across Europe, both in Germany and Spain. During the so called austerity, Spain debt to GDP grew from 54% to 84%. So naturally they cut back on spending, it was debt based and they had to meet interest costs when rates were rising. 

Did the Euro area raise rates in late 2011? Yes, by half a point. Yes, the friggen yield curve has to remain linear, go ask Brad Delong, a lesson he is learning. The currency banker has no business leaving a discontinuity in the curve. The currency banker has to keep the yield curve connected, in spite of Krugman's magic potion. It is not an independent variable, that is a crock of nonsense invented by the Basket Weavers of MIT.

High oil prices and higher bond rates is the reason Sweden had to raise rates at the time. It was not until June, 2014 that we had the latest oil price deflation.  Prices were kept up all this time because of debt based spending by government.

Here is is, Brent oil prices. Almost at the recession peak level until 2014. 

There is only so much crap the probability and statistics guys are going to put up with, and the MIT Basket Weavers have been performing poorly in that area for 40 years.