François Hollande a Supply Sider ? Oh M.Hollande SVP Say it ain’t So .Victor Hugo Would Not Approve.

Well it didn’t take long. Its not even 24 hours since François Hollande has assumed the Presidency of France and already some insiders are claiming, perhaps accurately although in my view its still too early to say definitively that M.Hollande is not a Keynesian but rather a supply sider in the tradition of Jacques Delors. Je suis désolé, M.Hollande mais cette stratégie ne fonctionne pas.Certainly not on its own and not after a major slump.

The source for this rumour is an article in the Financial Times by Phillipe Aghion which argues that he is a close economic advisor to M.Hollande , and states he teaches at Harvard and knows that Hollande believes in supply side economics as opposed to the economics of Keynes. I can assure you in the current circumstances where aggregate demand is hugely depressed through out most of Europe outside of Germany and Austria an approach which focuses on incentives to supply alone will not work. You will be spinning your wheels as we often discover here in Canada during winter when our cars are stuck on an icy rut in the road. One needs instead a big push to get the car out of the rut and on its way again. This is precisely what is needed in Europe . By all means target the expenditures and investments strategically to enhance education , training, work experience for the young, the environment and competitiveness but you must privilege increasing aggregate demand as opposed to direct deficit reduction through budgetary compression if you are going to make progress and escape from the trap of austerity. With the co-operation of the central bank in keeping interest rates low a proper recovery can occur.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, deficit hysteria, European debt crisis, European unemployment, France politics+economy, Uncategorized and tagged , , . Bookmark the permalink.

2 Responses to François Hollande a Supply Sider ? Oh M.Hollande SVP Say it ain’t So .Victor Hugo Would Not Approve.

  1. romain cansaran says:

    Despite being a “socialiste” he is indeed a supply-sider, thus following the American example of Obama’s election after Bush…in a way we can say that the neocon agenda doesn’t look at political affiliations to continue its journey

  2. I hope that you are not completely correct. It may be that M.Hollande has to realize that one cannot combine the two approaches and expect success except in the way that I outline. we shall see time will tell. Merci pour votre commentaire.

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