Transcript
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End This Depression Now!
Paul Krugman
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Yes, it’s a depression
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Good old IS-LM has worked fine
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No crowding out
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Liquidity traps rule
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Structural foolishness: geography
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Structural foolishness: occupations
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But why no deflation?
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Nominal rigidity is real
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Separated at birth
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Keynes was right
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Any sign of the confidence fairy?
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Not here
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Debt: Not good, but not unprecedented
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Hysteresis in action?
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Conclusion: Looking for risks in all the wrong places Obsessing over: -- Invisible bond vigilantes -- Not scaring off the confidence fairy Ignoring: -- Huge losses in foregone output and employment -- Long-term damage to economic potential