In 1999, in The Return of Depression Economics , Paul Krugman surveyed the economic crises that had swept across Asia and Latin America, and pointed out that those crises were a warning for all of us: like diseases that have become resistant to antibiotics, the economic maladies that caused... read more
“"For developing countries, there are no small devaluations."”
Recessions, in other words, can be fought simply by printing money—and can sometimes (usually) be cured with surprising ease.Highlighted by 61 Kindle customers
a recession is normally a matter of the public as a whole trying to accumulate cash (or, what is the same thing, trying to save more than it invests) and can normally be cured simply by issuing more coupons.Highlighted by 59 Kindle customers
If the central bank is overoptimistic about how many jobs can be created, if it puts too much money into circulation, the result is inflation.Highlighted by 58 Kindle customers
The lesson for the real world is that your vulnerability to the business cycle may have little or nothing to do with your more fundamental economic strengths and weaknesses: bad things can happen to good economies.Highlighted by 57 Kindle customers
Eventually the term came to refer to any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly.Highlighted by 50 Kindle customers
one thing that can get an economy out of a liquidity trap is expected inflation, which discourages people from hoarding money.Highlighted by 49 Kindle customers
And then something changed. Some combination of factors that we still don’t fully understand—lower tariff barriers, improved telecommunications, the advent of cheap air transport—reduced the disadvantages of producing in developing countries.Highlighted by 49 Kindle customers
There are three things that macroeconomic managers want for their economies. They want discretion in monetary policy so that they can fight recessions and curb inflation. They want stable exchange rates so that businesses are not faced with too much uncertainty. And they want to leave international business free—in particular, to allow people to exchange money however they like—in order to get out of the private sector’s way.Highlighted by 42 Kindle customers
It was not an edifying spectacle; but no matter how base the motives of those involved, the result was to move hundreds of millions of people from abject poverty to something that was in some cases still awful but nonetheless significantly better.Highlighted by 40 Kindle customers
by the mid-1980s many Latin American economists had abandoned the statist views of the fifties and sixties in favor of what came to be called the Washington Consensus: growth could best be achieved via sound budgets, low inflation, deregulated markets, and free trade.Highlighted by 32 Kindle customers
Introduction
1. "The Central Problem Has Been Solved"
2. Warning Ignored: Latin America's Crises
3. Japan's Trap
4. Asia' Crash
5. Policy Perversity
6. Masters of the Universe
7. Greenspan's Bubbles
8. Banking in the Shadows
9. The Sum of All Fears
10. The Return of Depression Economics
We’re hiding the errata, movie connections, books that influenced this book, books influenced by this book, books that cite this book and books cited by this book sections. If you would like to add content to them, you must first make them visible.