The Return of Depression Economics and the Crisis of 2008, 2e (Norton; 2009)

Our newest Nobel Prize-winning economist 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 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 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 Cover......Page 1 Title page......Page 9 Copyright page......Page 10 Contents......Page 11 Introduction [3]......Page 15 About This Book......Page 18 1 "The Central Problem Has Been Solved" [9]......Page 21 Capitalism Triumphant......Page 22 The Taming of the Business Cycle......Page 27 Technology as Savior......Page 34 The Fruits of Globalization......Page 36 Skeptics and Critics......Page 40 2 Warning Ignored: Latin America's Crises [30]......Page 42 Mexico: Up from the 1980s......Page 44 Argentina's Break with the Past......Page 50 Mexico's Bad Year......Page 54 The Tequila Crisis......Page 58 The Great Rescue......Page 62 Learning the Wrong Lessons......Page 64 3 Japan's Trap [56]......Page 68 Japan as Number One......Page 69 Bubble, Toil and Trouble......Page 73 A Stealthy Depression......Page 78 Japan's Trap......Page 79 Japan Adrift......Page 83 Japan's Recovery......Page 88 4 Asia's Crash [77]......Page 89 The Boom......Page 90 July 2, 1997......Page 96 Meltdown......Page 100 Contagion......Page 103 Why Asia? Why 1997?......Page 106 Epilogue: Argentina, 2002......Page 109 The Deeper Question......Page 112 5 Policy Perversity [101]......Page 113 How the International Monetary System Didn't Evolve......Page 115 The Speculative Threat......Page 121 The Confidence Game......Page 123 Did the IMF Make the Situation Worse?......Page 127 6 Masters Of The Universe [119]......Page 131 The Nature of the Beast......Page 132 The Legend of George Soros......Page 134 The Madness of Prime Minister Mahathir......Page 137 The Attack on Hong Kong......Page 139 The Potemkin Economy......Page 144 The Panic of 1998......Page 146 7 Greenspan's Bubbles [139]......Page 151 The Age of Greenspan......Page 152 America's Designated Driver......Page 154 Greenspan's Bubbles......Page 156 When Bubbles Burst......Page 163 The History of Banking, Simplified......Page 165 The Shadow Banking System......Page 170 Malign Neglect......Page 174 9 The Sum Of All Fears [165]......Page 177 The Housing Bust and Its Fallout......Page 178 The Non-Bank Banking Crisis......Page 182 The Fed Loses Traction......Page 184 The Mother of All Currency Crises......Page 188 A Global Slump......Page 191 10 The Return Of Depression Economics [181]......Page 193 What Is Depression Economics?......Page 194 What to Do: Dealing with the Emergency......Page 196 Financial Reform......Page 201 The Power of Ideas......Page 202 About the Author......Page 205 Economics Cover 1 Title page 9 Copyright page 10 Contents 11 Introduction [3] 15 About This Book 18 1 "The Central Problem Has Been Solved" [9] 21 Capitalism Triumphant 22 The Taming of the Business Cycle 27 Technology as Savior 34 The Fruits of Globalization 36 Skeptics and Critics 40 2 Warning Ignored: Latin America's Crises [30] 42 Mexico: Up from the 1980s 44 Argentina's Break with the Past 50 Mexico's Bad Year 54 The Tequila Crisis 58 The Great Rescue 62 Learning the Wrong Lessons 64 3 Japan's Trap [56] 68 Japan as Number One 69 Bubble, Toil and Trouble 73 A Stealthy Depression 78 Japan's Trap 79 Japan Adrift 83 Japan's Recovery 88 4 Asia's Crash [77] 89 The Boom 90 July 2, 1997 96 Meltdown 100 Contagion 103 Why Asia? Why 1997? 106 Epilogue: Argentina, 2002 109 The Deeper Question 112 5 Policy Perversity [101] 113 How the International Monetary System Didn't Evolve 115 The Speculative Threat 121 The Confidence Game 123 Did the IMF Make the Situation Worse? 127 6 Masters Of The Universe [119] 131 The Nature of the Beast 132 The Legend of George Soros 134 The Madness of Prime Minister Mahathir 137 The Attack on Hong Kong 139 The Potemkin Economy 144 The Panic of 1998 146 7 Greenspan's Bubbles [139] 151 The Age of Greenspan 152 America's Designated Driver 154 Greenspan's Bubbles 156 When Bubbles Burst 163 8 Banking In The Shadows [153] 165 The History of Banking, Simplified 165 The Shadow Banking System 170 Malign Neglect 174 9 The Sum Of All Fears [165] 177 The Housing Bust and Its Fallout 178 The Non-Bank Banking Crisis 182 The Fed Loses Traction 184 The Mother of All Currency Crises 188 A Global Slump 191 10 The Return Of Depression Economics [181] 193 What Is Depression Economics? 194 What to Do: Dealing with the Emergency 196 Financial Reform 201 The Power of Ideas 202 About the Author 205 economics;,history;,business;,world,politics;,globalization economics,history,business,world politics,globalization 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 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. Our Newest Nobel Prize-winning Economist Shows How Today's Crisis Parallels The Events That Caused The Great Depression And Explains What It Will Take To Avoid Catastrophe.,In His 1999 Book, Nobel Prize-winning Economist Krugman Surveyed The Economic Crises That Had Swept Across Asia And Latin America, And Pointed Out That They Were A Warning: Like Antibiotic-resistant Diseases, The Economic Maladies That Caused The Great Depression Were Making A Comeback. In The Years That Followed, As Wall Street Boomed And Wheeler-dealers Made Vast Profits, The Crises Of The 1990s Faded From Memory. But When The Great Housing Bubble Of The Mid-2000s Burst, The U.s. Financial System Proved As Vulnerable As Those Of Developing Countries. In This Greatly Updated Edition, Krugman Shows How The Failure Of Regulation To Keep Pace With An Out-of-control Financial System Set The United States, And The World, 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.--from Publisher Description. Our newest Nobel Prize-winning economist shows how today's crisis parallels the events that caused the Great Depression and explains what it will take to avoid catastrophe. In his 1999 book, Nobel Prize-winning economist Krugman surveyed the economic crises that had swept across Asia and Latin America, and pointed out that they were a warning: like antibiotic-resistant diseases, the economic maladies that caused the Great Depression were making a comeback. In the years that followed, as Wall Street boomed and wheeler-dealers made vast profits, the crises of the 1990s faded from memory. But when the great housing bubble of the mid-2000s burst, the U.S. financial system proved as vulnerable as those of developing countries. In this greatly updated edition, Krugman shows how the failure of regulation to keep pace with an out-of-control financial system set the United States, and the world, 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.--From publisher description. Surely the Great Depression could not happen again; our economists and policy makers simply have too many tools in their kit and too much experience applying them. Or could it? Paul Krugman gives us a sobering tour of the global economic crises of the last two years. In the 1930s policy makers realized that they had to limit the free market in order to save it. Today, when governments worldwide have spent decades lifting regulatory restraints on trade within and across their borders, interference in markets is completely out of favor as a policy tool. With his usual creativity and willingness to consider new ideas, Krugman suggests that a variety of capital restraints may well be in order Our Newest Nobel Prize-winning Economist Shows How Today's Crisis Parallels The Events That Caused The Great Depression And Explains What It Will Take To Avoid Catastrophe. The Central Problem Has Been Solved -- Warning Ignored : Latin America's Crises -- Japan's Trap -- Asia's Crash -- Policy Perversity -- Masters Of The Universe -- Greenspan's Bubbles -- Banking In The Shadows -- The Sum Of All Fears -- The Return Of Depression Economics. Paul Krugman. HONG Kong's elite may have been sleeping off the festivities of the previous night; but there was no break for the construction crews working frantically on Hong Kong's grandiose new convention center, trying to finish it in time to accommodate the annual joint meeting of the International Monetary Fund and the World Bank. The New York Times bestseller: the Nobel Prize–winning economist shows how today’s crisis parallels the Great Depression—and explains how to avoid catastrophe. With a new foreword for this paperback edition. This book is for anyone with any level of economic background who wishes to understand the stunning events in today's global economy