An invaluable guide no business or general lending library should be without

books:

	• The Return of Depression Economics and the Crisis of 2008 Paul Krugman W. W. Norton, 2008 - 224 pages average customer review:based on 108 reviews view larger image
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highly recommended

Short and Sweet

A well-written summary of the major financial swings of the last 20 years. Krugman briefly covers the economic dynamics of the Asian and Latin American crises in the 90s and uses them to set up a description of the 2008 financial crisis here in the US. Krugman's clear writing style and format is one of this book's strengths; its brevity is its most pronounced weakness. I think that he could have given a significantly more in-depth analysis that would have offered greater insight into the mistakes that help to facilitate these events. Written for the macroeconomic novice, you will be able to follow the major concepts of this book without difficulty.

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Down the Rabbit Hole

Although written initially in 1999, "The Return of Depression Economics" has been substantially re-written to take into account developments between 1999 and the new publication date ten years later. Much has changed in that decade.

Krugman describes his conclusion late in the book, which I have not read elsewhere but it makes perfect sense: the collapse of the credit markets in 2008 was almost entirely due to the catastrophic failure of the so-called "shadow banking system" -- the commercial paper market (the CDOs, the auction-rate and subprime mortgage-backed securities, etc.) -- and these instruments were not only largely unregulated but also not FDIC insured. That is why extraordinary efforts by the Fed to right the system -- unprecedentedly low Fed interbank rates, $700 billion in bailout funds, the closure or public takeover of many many banks -- has had so little effect. The failure stemmed from institutions outside the domain of the Federal Reserve, so the Fed has been essentially powerless to restart the system.

The solution seems clear to the reader, if not to Congress. Throughout this book Krugman describes the wild gyrations of boom-and-bust cycles, in the Latin American currency markets (1994-1996), in Asian foreign exchanges (1997-1998), the dot-com bubble (1998-2000), the housing bubble (2001-2008). What each of these roller coaster rides has in common is the multiplier effect, and consequent injection of instability, caused by unfettered speculators. Although Krugman does not come out and explicitly state this, it's evident that high-stakes gambling has turned world economic markets into unreliable, irrational, unpredictable and hugely-dangerous free-for-alls. Reinstatement of 1932's Glass-Steagall Act, and a brick wall between private speculators (commodity, currency and asset) and publicly-guaranteed financial instruments, must be the top priority to stabilize the financial markets.

Wall Street's playboys must be prevented from gaming the system for personal gain.

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An invaluable guide no business or general lending library should be without

The Return of Depression Economics and the Crisis of 2008 is a top pick from a New York Time columnist who has argued for an overhaul of America's financial system that would include massive regulation and a large stimulus package. His ongoing comments on the changing political and financial world includes commentary on the work the Obama administration has done thus far and recommendations for continuing to improve the economy, and makes for an invaluable guide no business or general lending library should be without.

What tells Krugman is always intersting.

Krugman talks about the opportunity for USA to superate cyclic crisis.
He asks himself if the economic question depends only by the law of supply and domand or something happens for the financial policy.
The auctor is one of better economists in the world and he prefers an idea to the other utilizing a big quantity of informations.
He is ready to tell us most important questions, from the international strategies to the housewife choices.
His capacity to read the minimal aspects in the market is equivalent to his influence in mass media.

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reviews: page 1, 2, 3, 4, 5, 6, 7, 8, 9, 10

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.

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