Product Description

Paul Krugman, winner of the 2008 Nobel Prize in economics, shows how today’s crisis parallels the events that caused the Great Depression – and explains what it will take to avoid catastrophe. In 1999, in The Return of Depression Economics, Paul Krugman surveyed the economic crises that had swept across Asia and Latin America, and warned that those crises were a warning for all of us: like diseases that have become resistant to antibiotics, the economic maladies that caused the Great Depression were making a comeback.In the years that followed, as Wall Street boomed and financial wheeler-dealers made vast profits, the international crises of the 1990s faded from memory. But now depression economics has come to America: when the great housing bubble of the mid-2000s burst, the U.S. financial system proved as vulnerable as those of developing countries caught up in earlier crises – and a replay of the 1930s seems all too possible. In this new, greatly updated edition of The Return of Depression Economics, Krugman shows how the failure of regulation to keep pace with an increasingly out-of-control financial system set the United States, and the world as a whole, up for the greatest financial crisis since the 1930s. He also lays out the steps that must be taken to contain the crisis, and turn around a world economy sliding into a deep recession. Brilliantly crafted in Krugman’s trademark style—lucid, lively, and supremely informed – this new edition of The Return of Depression Economics will become an instant cornerstone of the debate over how to respond to the crisis.

Product Details

• Amazon Sales Rank: #3838 in Books
• Published on: 2008-12-04
• Original language: English
• Binding: Paperback
• 208 pages

Customer Reviews

There IS a free lunch
In this book Paul Krugman analyzes the economic and financial crises from the 1980s on in Japan, Mexico, Argentina, Thailand and the US. He clearly points his finger at the lessons to be learnt and gives on a plate the evident solutions to clear up the mess and to put the world economy on a stable growth path again.

From the 1980s on, capitalism ruled the world unchallenged. But, its greatest enemies are as always, wars and depressions (`the Great Depression in the US in the 1930s came close to destroying both capitalism and democracy and led more or less directly to war.') `The Great Depression was brought to an end by a massive deficit-financed public works program, known as World War II.'

The Asian and Latin-American crises showed the dangers of foreign currency debts (countries are completely dependent on the goodwill of foreign investors), of use and abuse of the printing press (inflation), of rigid exchange rate systems, of cronyism and of economic policies based on `political connections'. Loss of market confidence led to self-fulfilling speculations and self-fulfilling economic panics.

In Japan, the main reason for the economic slump was a real estate bubble.

For Paul Krugman, the main culprit for the debacle in the US was the shadow banking system (not regulated non-bank banks) and the unacceptable risks these corporations took while betting on the concept of moral hazard (heads I win - the private investor, tails you lose - the government = the tax payers).

Actually we are confronted with failures on the demand side (insufficient private spending) together with a credit crunch. Through real and massive Keynesian anti-depression policies (public works), spending should be propped up and credit should be flowing again.
There is a real free lunch available because there are unemployed resources that could be put to work.

Concerning the Soros legend, as Gene G. Marcial unveils in his book `Secrets of the Street', G. Soros had a mole in the Bank of England. By the way, who was the second party in the monstrous anti-pound speculation and who lost the billions? The National Bank of Malaysia?

This eminent crash course for economists is a must read for all those who want to understand the world we live in.

Up there with the best popular writers
Krugman doesn't just make economics accessible to the layman but also provides his own unique insights, in this case to the global economic crisis we're currently in. He also has his own, idiosynchratically exciting way of explaining concepts. You will find differences with other accounts, such as Stiglitz's (whom I greatly admire and am more keen to agree with), which is good, because it provides more food for thought and challenge to the orthodoxy. If you are interested in the global economic state of affairs, you will greatly appreciate this work.

Excellent Analysis of the current situation, light on solutions
I liked the style of this book, Krugman is a good teacher and in his run-through of financial disasters both old and new he has a sure touch. His use of a baby sitting circle to demonstrate liquidity problems is inspired and this is a good read with lots of information.

The only problem is in the last chapter where he maintains that the heart of the problem is that we haven't concentrated on the supply side of the economic situation. I'm not sure what he means here, as far as I can see the supply side had been part of the problem, and he's not clear what his prescription would mean.

Other than that this is a fine book, readable and timely - I see he was warning about deflationary problems way back in 1999.