In a new paper (here or here) based on my talk at the IMK anniversary in Berlin, I discuss the intermediaries between academic economists and politicians. Very few politicians have much knowledge of economics themselves, and so rely on intermediaries to transmit that knowledge. One important intermediary, particularly if you are not in government, is the media, and another is what Paul Krugman called policy entrepreneurs. In government you have the civil service. In the case of fiscal policy, central banks are a potential intermediary.
In the paper I look at how needless austerity could represent a failure in that transmission mechanism. I do not think for one moment that they are as important a reason as political opportunism by those on the right that want a smaller state. But I still think they are important, particularly in helping to explain why so many on the left feel unable to counter the populist line that the government must ‘tighten its belt’ even in the midst of the deepest recession since the war.
It is also important in explaining how opportunist politicians can get away with it. Just imagine if central banks had used their models to quantify the impact of austerity, and had made that analysis public. Imagine also if there had been some authoritative way of conveying the wisdom of the majority of academic economists, like the National Academy of Sciences in the US or the Royal Society in the UK. In the UK and US I think that might have made a difference.