The Return of Depression Economics and the Crisis of 2008

In1999,inTheReturnofDepressionEconomics,PaulKrugmansurveyedtheeconomiccrisesthathadsweptacrossAsiaandLatinAmerica,andpointedoutthatthosecriseswereawarningforallofus:likediseasesthathavebecomeresistanttoantibiotics,theeconomicmaladiesthatcausedtheGreatDepressionweremakingacomeback.Intheyearsthatfollowed,asWallStreetboomedandfinancialwheeler-dealersmadevastprofits,theinternationalcrisesofthe1990sfadedfrommemory.ButnowdepressioneconomicshascometoAmerica:whenthegreathousingbubbleofthemid-2000sburst,theU.S.financialsystemprovedasvulnerableasthoseofdevelopingcountriescaughtupinearliercrisesandareplayofthe1930sseemsalltoopossible.Inthisnew,greatlyupdatededitionofTheReturnofDepressionEconomics,Krugmanshowshowthefailureofregulationtokeeppacewithanincreasinglyout-of-controlfinancialsystemsettheUnitedStates,andtheworldasawhole,upforthegreatestfinancialcrisissincethe1930s.Healsolaysoutthestepsthatmustbetakentocontainthecrisis,andturnaroundaworldeconomyslidingintoadeeprecession.BrilliantlycraftedinKrugman'strademarkstyle--lucid,lively,andsupremelyinformed--thisneweditionofTheReturnofDepressionEconomicswillbecomeaninstantcornerstoneofthedebateoverhowtorespondtothecrisis.