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Paul Krugman: Depression Economics Returns
Economist's View —
Since I've been saying that monetary policy loses its ability to stimulate the economy when we are in a recession for over fifteen years, and since I've been making this point repeatedly since the crisis first began, I can hardly disagree:
Depression Economics Returns, by Paul Krugman, Commentary, NY Times: The
economic news, in case you haven’t noticed, keeps getting worse. Bad as it is,
however, I don’t expect another Great Depression. ...
We are already, however, well into the realm of what I call depression
economics. By that I mean a state of affairs like that of the 1930s in which the
usual tools of economic policy — above all, ...
Krugman: Return of Depression Economics
Calculated Risk —
From Professor Krugman: Depression Economics Returns. A few excerpts: I don’t expect another Great Depression ... [but] We are ... well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly. To see ...
A $600 Billion Fiscal Stimulus?
Greg Mankiw's Blog —
Paul Krugman makes the case here and here.
Friday morning links
The Mess That Greenspan Made —
... Little Changed as Economic Slowdown Curbs Fuel Consumption - Bloomberg Gold and other metals rally in early trade - MarketWatch Investors pull $31.8B out of stock funds - CNN/Money Why China wants to beat America in Gold reserves - Commodity Online China Expected to Shift Reserves into Commodities and Gold - Jesse's Cafe ECONOMY U.S. Retail Sales Drop in October by Most on Record - Bloomberg Depression Economics Returns - NY Times The High Priests of the Bubble Economy - TPM Cafe 76% ...
Fed wields wet noodle as retail sales plunge by record
BloggingStocks —
Filed under: Economic data, Federal Reserve, Recession, Financial Crisis I confess that I am getting sick of writing about bad news. But it is worse to put your head in the sand, so here comes some more: October retail sales plunged by a record 2.8% -- surpassing the previous record of 2.65% set in November 2001. And if that's not bad enough, despite hints at a rate cut, the Fed is effectively out of ammunition.
What's behind the collapse in retail sales? Key factors include a 5.5% plunge in auto sales -- the biggest drop since August 2005 -- coupled with a 0.4% sales drop for general merchandise stores; 1.4% lower sales at ...
A black Friday for 16,000 workers as Citi and Sun plan massive layoffs
BloggingStocks —
Filed under: Forecasts, Citigroup Inc. (C), Sun Microsystems (JAVA), Economic data, Financial Crisis On THursday, government statistics announced that 516,000 Americans filed for unemployment in the first week of November. Today, 16,000 more workers from two companies joined what is likely to be a daily list that strikes fear into the hearts of people across the country. And why not? After eight years of declining inflation-adjusted wages, their reward for hanging on is a heightened risk of losing those jobs altogether and competing with more people for fewer jobs in a receding economy.
The two companies announcing big ...
Links: First-World Debt Restructuring, Depression Economics, etc.
Paul Kedrosky's Infectious Greed —
Some quick links to items of interest: The fiscal woes of cities and states (The Economist) Iceland, Switzerland, Denmark, Sweden, Jordan and countries with banks that are too big to bail out (Bronte) China Can Help (WSJ.com) Thirty Year Bond Auction: Not a Good Result for Hank Paulson (ATC) China’s fiscal stimulus doesn’t necessarily mean that it will stop buying Treasuries (Setser) VCs are having 2001 flashbacks (Bloomberg) Asian economies could use their own Gordon Brown (Bloomberg) A federal welfare package for the U.S. ...
Fed wields wet noodle as retail sales plunge by record
BloggingStocks —
Filed under: Economic data, Federal Reserve, Recession, Financial Crisis I confess that I am getting sick of writing about bad news. But it is worse to put your head in the sand, so here comes some more: October retail sales plunged by a record 2.8% -- surpassing the previous record of 2.65% set in November 2001. And if that's not bad enough, despite hints at a rate cut, the Fed is effectively out of ammunition.
What's behind the collapse in retail sales? Key factors include a 5.5% plunge in auto sales -- the biggest drop since August 2005 -- coupled with a 0.4% sales drop for general merchandise stores; 1.4% lower sales at ...
NYT's Krugman: Think economic momentum, not balanced budgets
BloggingStocks —
Filed under: Forecasts, Economic data, Politics, RecessionNew York Times columnist and Nobel Prize-winning economist Paul Krugman underscores that those who are thinking in terms of a balanced federal budget now are doing a serious disservice to the economy, and, by extension, to the nation. It's important for the U.S. Government to return to a balanced budget when the economy returns to health, but it is critically important for Congress to approve a large fiscal stimulus to help the U.S. economy recover from the current recession, he said. Sees danger of vicious cycle That's because ...
Shiller, Akerloff and Animal Spirits Driving the Economy
InvivoAnalytics.com —
The world is awash with books about the “crash”, the credit crisis and depression economics . One of these — Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism — by Robert Shiller and George Akerlof seems to be getting traction. I don’t agree with the idea of irrational exuberance but since people listen to Shiller, it is a good idea to be familiar with the material. He recently gave a lecture at The New School: MORE: How ‘animal spirits’ move the market HAT TIP: Stephen Kinsella Questions and Comments Please log in to join the discussion if you do not see the text box below. Dear ...
