The Return of Depression Economics (Penguin Business Library) Book

What do baby-sitting co-ops and liquidity traps have in common? Lots if you're Paul Krugman. In The Return of Depression Economics, the MIT professor looks at the alarming string of recent financial crises that have plagued various economies around the globe, especially the ongoing Asian contagion, and sees an "eerie resemblance to the Great Depression." Instead of the "new world order" promised by the triumph of capitalism over socialism, "the world economy has turned out to be a much more dangerous place than we imagined." With the help of the workings of a Washington D.C. babysitting co-op to explain the dynamics of recession and inflation, Krugman examines the remarkable emergence of Asia and the precursors to the current Asian mess--the Tequila crisis of the mid-90s that began in Mexico and Japan's fall in the early 90s into an extended economic malaise that continues even today. He then analyses the underlying reasons for the collapse of the Thai baht and other Asian currencies as well as the subsequent actions of the IMF and the murky role of hedge funds. In the end, Krugman sees the return of depression economics, which "means that for the first time in two generations, failures on the demand side of the economy--insufficient private spending to make use of the available productive capacity--have become the clear and present limitation on prosperity for a large part of the world." It's the same problem that was at the root of the 1930s depression. And while it took a world war to solve that problem, Krugman sees solutions that are far less dramatic but that do require a willingness to chuck obsolete doctrines and think about old problems in new ways. Over the years Krugman has earned a well-deserved reputation for translating the econo-jargon that economists speak into something that anyone with an interest--not a PhD--can understand. The Return of Depression Economics is another timely testament to Krugman's ability to read and interpret the tea leaves of today's global economy. Highly recommended. --Harry C. Edwards, Amazon.comRead More