Mediamacro

Politicians who appeared to deviate from the new ‘mediamacro consensus’ of deficit fetishism suffered as a consequence.

Mediamacro has a number of general features. It puts much more emphasis than conventional macroeconomics does on the financial markets, and on the views of participants in those markets. It prefers simple stories to more complex analysis. As part of this, it is fond of analogies between governments and individuals, even when those analogies are generally seen to be false by macroeconomists.

Simon Wren-Lewis has been on a lonely crusade against “mediamacro”, a narrative about the British economy that is untrue — or at the very least easily challenged and at odds with textbook economics — yet is stated in the news media not as a hypothesis but as a fact.

A key element of mediamacro is the naive assumption that higher government borrowing is inherently dangerous and that lower borrowing is always praiseworthy.