The Return of Depression Economics, By Paul Krugman

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The Independent Culture

Paul Krugman may think as hard as Keynes and write as well as Galbraith, but it's not his Nobel Prize in economics that gives this brisk analysis of the sources of our current plight its weight. Updated to discuss today's global turmoil, it has a salutary quote from another laureate, Robert Lucas. In 2003, he said: "the central problem of depression-prevention" had been solved.

Ben Bernanke, now head of the Fed, also claimed that "macroeconomic policy had solved the problem of the business cycle". Much of this bracing book looks at the slumps of the 1990s in Asia and Latin America. The point is that no one learnt from them. His finale, which calls for the "full temporary nationalisation" of much finance, argues that this crisis "is like everything we've seen before, all at once".

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