The Return Of Depression Economics

Download or read book The Return of Depression Economics written by Paul R. Krugman and published by . This book was released on 2000 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 1931 crisis of Austria's largest bank, Credit Anstalt, which collapsed as a result of capital flight depleting its reserves, is all too familiar a scenario in the late 1990s. Brazil, Malaysia and Japan have all experienced similar crises, and the US and Europe are not immune. Economic policy reforms by Western governments have taken us back to a regime with many of the virtues of pre-depression, free-market capitalism, but with some key vices, notably a vulnerability to instability and sustained economic slumps. As a result of these reforms, depression economics has now emerged as a real concern, and Paul Krugman believes that sooner or later we will have to return to regulation of financial markets, limits on capital flows and a recognition that low inflation is less dangerous than price instability.