IMF Admits Mistake In Calculating Fiscal Multiplier In Eurozone

The IMF reported that it underestimated the impact of its austerity recommendations in the eurozone.  It believed that a one euro cut in spending would only produce a one half euro reduction in output.  In fact it produced a 1.5 reduction in output.  That is a serious admission. Millions have been harmed by the IMF policy recommendation, and it may be difficult to overcome the policy mistakes that were made.