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Vocapedia > Economy > Economics, Economists, Economic policies / doctrines

 

 

 

 

Can these people convince you that the economy is interesting?        G        26 July 2018

 

Nearly 90% of people feel bored or confused

when politicians use jargon to talk about economics,

according to the charity Economy,

which holds free classes across the country

to help take away the barriers to understanding

and change how people think

 

YouTube

https://www.youtube.com/
watch?v=75Rb6J-Pck0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 The grim reaper looms …

Chris Riddell on the consequences of a Conservative victory

O        Sunday 3 May 2015        00.05 BST

http://www.theguardian.com/commentisfree/picture/2015/may/03/the-grim-reaper-looms

 

L: Margaret Thatcher

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

British economist John Maynard Keynes

conferring w. unident. delegate

during international monetary conference

to plan for postwar reconstruction

 

Location: Bretton Woods, NH, US

Date taken: July 1944

 

Photographer: Alfred Eisenstaedt

Life Images

http://images.google.com/hosted/life/fb892c4ea62cb7f3.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

economics        UK / USA

 

http://www.theguardian.com/books/economics

 

 

https://www.youtube.com/
watch?v=75Rb6J-Pck0 - G - 26 July 2018

 

http://www.nytimes.com/2014/05/02/
opinion/krugman-why-economics-failed.html

 

http://www.nytimes.com/2013/10/21/
opinion/yes-economics-is-a-science.html

http://www.guardian.co.uk/business/economics-blog/2013/may/01/
economics-of-enough

 

http://www.nytimes.com/roomfordebate/2012/04/01/
how-to-teach-economics-after-the-financial-crisis

 

http://www.nytimes.com/2011/10/14/
opinion/rabbit-hole-economics.html

 

http://www.guardian.co.uk/business/2008/oct/20/
governmentborrowing-economics

 

 

 

 

macroeconomics        USA

http://www.npr.org/2016/04/24/
475432149/could-you-come-up-with-400-if-disaster-struck

 

 

 

 

microeconomics        USA

http://www.npr.org/2016/04/24/
475432149/could-you-come-up-with-400-if-disaster-struck

 

 

 

 

be awarded

the Nobel Memorial Prize in Economic Science

http://www.nytimes.com/2012/10/16/
business/economy/alvin-roth-and-lloyd-shapley-win-nobel-in-economic-science.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UK > economic doctrine > austerity policies / austerity        UK / USA

 

https://www.theguardian.com/news/audio/2019/jun/11/
cruel-state-the-impact-of-austerity-on-disabled-people

 

https://www.nytimes.com/2018/05/28/
world/europe/uk-austerity-poverty.html

 

https://www.theguardian.com/society/2017/oct/21/
austerity-public-sector-pay-private

https://www.theguardian.com/commentisfree/picture/2017/jul/19/
steve-bell-on-philip-hammonds-long-term-economic-plan-cartoon

 

http://www.theguardian.com/business/ng-interactive/2015/apr/29/
the-austerity-delusion

http://www.theguardian.com/business/2015/apr/28/
top-economist-attacks-tory-austerity-labours-limp-response-paul-krugman

http://www.nytimes.com/2015/02/03/us/
obamas-budget.html

 

http://www.theguardian.com/society/2014/mar/18/
robert-reich-attacks-economic-austerity

 

http://www.nytimes.com/2012/09/21/
business/global/in-britain-spending-outpaces-austerity.html

 

 

 

 

 

 

 

economic doctrine > austerity policies / austerity        USA

 

http://www.nytimes.com/2015/11/06/
opinion/austeritys-grim-legacy.html

 

http://www.nytimes.com/2013/05/13/
opinion/how-austerity-kills.html

http://www.nytimes.com/2013/04/26/
opinion/debt-growth-and-the-austerity-debate.html

 

http://www.nytimes.com/2012/10/02/
opinion/spanish-protests-german-prescriptions.html

http://www.nytimes.com/2012/09/21/
business/global/in-britain-spending-outpaces-austerity.html

http://www.nytimes.com/2012/06/01/
opinion/krugman-the-austerity-agenda.html

http://www.nytimes.com/2012/04/27/
opinion/krugman-death-of-a-fairy-tale.html

 

 

 

 

 

 

 

austerity trap        USA

 

http://www.nytimes.com/2012/10/24/
opinion/the-austerity-trap.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

teach economics        USA

http://www.nytimes.com/roomfordebate/2012/04/01/
how-to-teach-economics-after-the-financial-crisis

 

 

 

 

foresee        USA

http://www.nytimes.com/2015/12/31/
business/dealbook/edward-hugh-economist-
who-foresaw-eurozones-struggles-dies-at-67.html

 

 

 

 

neuroeconomics        UK

http://www.guardian.co.uk/world/2011/jun/19/
neuroeconomics-women-city-financial-crash

 

 

 

 

behavioral economics        USA

http://www.nytimes.com/2010/07/16/
business/economy/16fed.html

http://www.nytimes.com/2010/07/15/
opinion/15loewenstein.html

 

 

 

 

Bretton Woods    1944

http://www.guardian.co.uk/politics/2008/nov/14/
bretton-woods-1944-keynes-imf

 

 

 

 

gold standard    1946-1971

http://news.bbc.co.uk/2/hi/business/337802.stm

http://www.house.gov/paul/congrec/congrec2006/cr021506.htm

http://www.youtube.com/watch?v=iRzr1QU6K1o

 

 

 

 

Bubblenomics        USA

http://www.nytimes.com/2008/09/21/
weekinreview/21leonhardt.html

 

 

 

 

Donald Trump > MAGAnomics        USA

http://www.npr.org/2017/07/14/
537263663/why-maganomics-isnt-likely-to-work

 

 

 

 

Barack Obama > Obamanomics        USA

http://opinionator.blogs.nytimes.com/2009/02/27/
has-obamanomics-vanquished-reaganomics/

 

 

 

 

Ronald Reagan > Reaganomics        USA

www.nytimes.com/2014/03/22/
business/murray-l-weidenbaum-reagan-economist-dies-at-87.html

http://www.guardian.co.uk/business/2004/jun/08/
usnews.economicdispatch

http://www.guardian.co.uk/business/2003/apr/20/
globalrecession.globalisation

http://content.time.com/time/magazine/article/
0,9171,924952,00.html 

 

 

 

 

'freeconomics'        UK

http://www.independent.co.uk/life-style/gadgets-and-tech/features/
how-can-youtube-survive-1734267.html

 

 

 

 

neoliberalism        UK

http://www.theguardian.com/books/2016/apr/15/
neoliberalism-ideology-problem-george-monbiot

 

 

 

 

economic policy        USA

http://www.nytimes.com/2009/06/15/
opinion/15krugman.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

economist

https://www.npr.org/2018/01/01/
574346190/economists-are-saying-we-will-have-a-happy-really-happy-new-year

 

http://www.nytimes.com/roomfordebate/2015/02/09/
are-economists-overrated

 

http://www.nytimes.com/2013/10/21/
opinion/yes-economics-is-a-science.html

 

http://www.nytimes.com/2011/10/11/
business/american-economists-share-nobel-prize.html

 

http://www.nytimes.com/2010/08/06/
business/economy/06deflation.html

 

http://www.guardian.co.uk/business/2008/oct/15/
unemploymentdata-workandcareers

 

 

 

 

economist > Thomas Piketty

http://dealbook.nytimes.com/2015/01/20/
echoes-of-piketty-in-obama-proposal-to-address-income-inequality/

http://www.nytimes.com/2015/01/03/
opinion/the-legion-of-honor-thomas-piketty-refuses.html

 

http://www.nytimes.com/2014/08/03/
arts/a-resurgence-in-inequality-and-its-effects-on-culture.html

http://www.theguardian.com/books/2014/jun/17/
thomas-piketty-lse-capitalism-talk

http://www.nytimes.com/2014/05/25/
upshot/a-new-critique-of-piketty-has-its-own-shortcomings.html

http://www.theguardian.com/business/2014/may/24/
thomas-picketty-economics-data-errors

http://www.nytimes.com/2014/05/24/
upshot/did-piketty-get-his-math-wrong.html

http://www.nytimes.com/2014/05/14/
opinion/edsall-thomas-piketty-and-his-critics.html

http://www.npr.org/2014/05/11/
310784652/on-income-inequality-a-french-economist-vs-an-american-capitalist

http://www.theguardian.com/business/video/2014/may/02/
thomas-piketty-capital-rock-star-economist-video

http://www.theguardian.com/books/2014/apr/28/
thomas-piketty-capital-surprise-bestseller

http://www.nytimes.com/2014/04/25/
opinion/brooks-the-piketty-phenomenon.html

http://www.nytimes.com/2014/04/25/
opinion/krugman-the-piketty-panic.html

http://www.nytimes.com/2014/04/20/
business/international/taking-on-adam-smith-and-karl-marx.html

http://www.theguardian.com/commentisfree/2014/apr/12/
capitalism-isnt-working-thomas-piketty

 

 

 

 

economist > Paul Krugman        UK

http://www.theguardian.com/business/ng-interactive/2015/apr/29/
the-austerity-delusion

http://www.theguardian.com/business/2015/apr/28/
top-economist-attacks-tory-austerity-labours-limp-response-paul-krugman

http://www.guardian.co.uk/business/2012/jun/03/
paul-krugman-cassandra-economist-crisis

 

 

 

 

economist > Paul A. Samuelson        USA

http://krugman.blogs.nytimes.com/2009/12/13/
paul-samuelson-rip/

http://www.nytimes.com/2009/12/14/
business/economy/14samuelson.html

 

 

 

 

Stephen Stanley

chief economist with RBS Greenwich Capital

 

 

 

 

Simon Hayley

senior international economist for Capital Economics

 

 

 

 

Edward Hugh Bengree-Jones        UK        1948-2015

http://www.nytimes.com/2015/12/31/
business/dealbook/edward-hugh-economist-who-foresaw-eurozones-struggles-dies-at-67.html

 

 

 

 

Rashi Fein        USA        1926-2014

 

influential economist

who strove to bring ethical

and humanitarian perspectives

to the nation’s health care system

and helped lay the intellectual groundwork

for Medicare in the 1960s

http://www.nytimes.com/2014/09/14/us/rashi-fein-economist-who-urged-medicare-dies-at-88.html

 

http://www.nytimes.com/2014/09/14/us/
rashi-fein-economist-who-urged-medicare-dies-at-88.html

 

 

 

 

Gary Stanley Becker        USA        1930-2014

 

Nobel prize-winning economics professor

and longtime columnist for Business Week

whose research illuminated motivations

about such aspects of everyday life

as marriage, crime, addiction,

racial discrimination and birthrates

https://www.nytimes.com/2014/05/05/
business/economy/gary-s-becker-83-nobel-winner-who-applied-economics-to-everyday-life-dies.html 

 

 

https://www.nytimes.com/2014/05/05/
business/economy/gary-s-becker-83-nobel-winner-who-applied-economics-to-everyday-life-dies.html 

http://www.npr.org/2014/05/05/
309840501/remembering-economist-gary-becker-who-described-marriage-market

 

 

 

 

monetarist guru / economist > Milton Friedman        1912-2006

http://www.theguardian.com/news/2006/nov/17/guardianobituaries.politics 

http://www.theguardian.com/business/2006/nov/17/usnews.money 

http://www.theguardian.com/business/2006/nov/16/usnews.internationalnews1 

 

 

 

 

Murray Weidenbaum        USA        1927-2014

 

as President Ronald Reagan’s

first chief economic adviser

(Murray Weidenbaum)

elevated government regulation of business

to the forefront of public policy debate

http://www.nytimes.com/2014/03/22/business/
murray-l-weidenbaum-reagan-economist-dies-at-87.html

 

 

 

 

Walter Isard        USA        1919-2010

 

economist

who founded

the field of regional science,

inspiring social scientists

to study the relationships between

such factors as geography,

migration and land use

in local or regional economies

http://www.nytimes.com/2010/11/11/business/economy/11isard.html

 

 

 

 

John Maynard Keynes        1883-1946

http://www.theguardian.com/books/2015/mar/05/seven-things-john-maynard-keynes

http://www.nytimes.com/2014/02/09/opinion/sunday/douthat-leaving-work-behind.html

http://www.guardian.co.uk/books/2013/may/04/niall-ferguson-apologises-gay-keynes

http://www.telegraph.co.uk/finance/economics/9987095/
JM-Keyness-prophecy-of-prosperity-after-the-gloom-of-recession.html

http://www.independent.co.uk/news/business/analysis-and-features/
john-maynard-keynes-can-the-great-economist-save-the-world-994416.html

 

http://www.guardian.co.uk/politics/2008/oct/20/economy-recession-treasury-energy-housing

http://www.time.com/time/time100/scientist/profile/keynes.html

 

 

 

 

Keynesian economics / policy / ideas

http://www.nytimes.com/2013/08/09/opinion/krugman-phony-fear-factor.html

 

http://www.guardian.co.uk/commentisfree/2008/oct/27/recession-creditcrunch

 

 

 

 

Keynesians

http://www.guardian.co.uk/business/2008/dec/14/
keynesian-economic-recovery-brown-germany

 

 

 

 

Karl Marx    1818-1883

http://www.nytimes.com/roomfordebate/2014/03/30/was-marx-right


http://www.nytimes.com/2013/03/31/books/review/karl-marx-by-jonathan-sperber.html

 

 

 

 

 

 

 

 

 

Murray L. Weidenbaum,

Reagan Economist,

Dies at 87

 

MARCH 21, 2014

The New York Times

By ROBERT D. HERSHEY Jr.

 

Murray L. Weidenbaum, who as President Ronald Reagan’s first chief economic adviser elevated government regulation of business to the forefront of public policy debate, but resigned unhappy about the administration’s budget-making, died on Thursday in St. Louis. He was 87.

His son, Jim, confirmed the death.

Mr. Weidenbaum, a Bronx-born economist, was fond of saying, “Don’t just stand there, undo something.” And he did, beginning in 1981, when the newly inaugurated Mr. Reagan appointed him chairman of the Council of Economic Advisers.

Reducing the size of government and lightening its regulatory hold on the private sector — including the banking, broadcasting and the food and drug industries — became a large theme of the Reagan presidency, which began with inflation still running in double digits and the economy heading into recession.

Deregulation, the White House believed, would help stimulate the economy by reducing the government rules and restrictions that industries say hamper their ability to expand and create jobs. But the policy’s critics feared that an unfettered private sector could be dangerous to the economy and the public interest.

At the heart of what came to be known as Reaganomics was the proposition that the nation could be restored to economic health through fiscally stimulating tax cuts — the essence of supply-side economic theory — and by restricting the money supply to contain inflation. Critics of the administration called that combination contradictory.

Mr. Weidenbaum, a wry and slightly rumpled figure who had long shuttled between government and academic posts, previously at Washington University in St. Louis, proved to be one of the administration’s least doctrinaire members, neither full-throated supply-sider nor strict monetarist.

“I was sympathetic to both,” Mr. Weidenbaum said in a 2011 telephone interview for this obituary. But neither side “thought I was one of them.”

He was also a prominent advocate of federal revenue-sharing, involving no-strings payments to states and localities. As an assistant secretary of the Treasury under President Richard M. Nixon, he had led a revenue-sharing initiative, which was briefly effective. But he wound up helping President Reagan dismantle the program when revenue sharing did not displace a proliferation of separate grants and payments to state and local governments voted for by Congress.

Though fiscally conservative, Mr. Weidenbaum was more moderate than some of his peers in the White House. He was generally aligned with administration pragmatists like the budget director, David A. Stockman, and the chief of staff, James A. Baker III. They favored compromising with Democrats in Congress on raising tax revenue and cutting military spending because of their concern about deficits.

Internal battles over budget deficits were a hallmark of the administration in those years.

Mr. Weidenbaum, in the 2011 interview, said he left the administration after a year and a half precisely because he was unhappy with the 1983 budget, and chose to quit rather than defend it before Congress.

Stepping down in August 1982, a time when Mr. Reagan’s popularity had plummeted and the country was sinking into a deep recession, Mr. Weidenbaum was replaced by Martin S. Feldstein.

“After fighting the good fight, I quietly folded my tent and returned to St. Louis,” Mr. Weidenbaum said.

But he left satisfied. In an Op-Ed article in The New York Times afterward, he wrote that the administration had “achieved significant progress in carrying out its economic recovery program” and that its deregulation efforts had been successful.

“For the first time in decades, no new major regulatory activities were enacted or promulgated,” he wrote. “In fact, many burdensome regulations were modified or rescinded.”

Mr. Weidenbaum also expressed general satisfaction with the administration’s policy in a 2005 memoir, “Advising Reagan: Making Economic Policy, 1981-82.”

“It seems clear that, on balance, Reaganomics was a success,” he wrote. “The president’s policies had injected a new sense of realism into the decision making in the private sector,” as both management and workers paid more attention to controlling costs and raising productivity.

Murray Weidenbaum (the first syllable rhymes with “feed”) was born on Feb. 10, 1927, into a liberal Democratic household in the Bronx. He graduated from Erasmus Hall High School in Brooklyn and the City College of New York, where he was elected president of the student body on a platform of “Wine, Women and Weidenbaum.”

Mr. Weidenbaum received a master’s degree from Columbia University, then joined the New York State Department of Labor as a junior economist. At the time, like his family, he held union-friendly views, and saw labor as the little guy at the mercy of big business. But he grew disillusioned with the labor cause after being assigned to a statistical analysis of a master contract for the Teamsters union. His encounter with an independent trucker who had vainly sought to negotiate on his own was a pivotal moment.

“The roles were reversed,” he said. “The little employer was dealing with the giant union.”

Laid off under New York State’s “last in, first out” policy, he found work in Washington at the Bureau of the Budget. During a leave to pursue doctoral work at Princeton, he met Phyllis Green. They married in 1954.

Besides his son, Jim, he is survived by two daughters, Laurie Stark and Susan Juster-Goldstein, and six grandchildren.

After marriage, he began a life characterized by the title of a 2009 autobiographical monograph, “Vignettes From a Peripatetic Professor,” moving among academia, government, industry and research institutes in Washington and elsewhere.

Mr. Weidenbaum had an early, formative stint in the military industry. The General Dynamics Corporation in Fort Worth hired him as an economist and had him analyze the operations of the B-58 supersonic bomber. Moving to Boeing, in Seattle, he developed forecasts of the military market.

The jobs exposed him to the numerous rules military contractors were subject to, underscored by the full-time presence of inspectors stationed in the factories.

“There’s more government regulation of the defense industry than any other,” Mr. Weidenbaum said in the 2011 interview, adding that complaints were seldom voiced for fear of offending the main customer, the government itself.

After Boeing, he moved to the Stanford Research Institute in California to continue studying the military industry.

That was followed by a turn in Washington as the staff director of President Lyndon B. Johnson’s Council of Economic Advisers.

He moved to St. Louis in early 1975 when Washington University created the Center for the Study of American Business and recruited him to be its first director. He was there when Mr. Reagan lured him back to the White House.

Mr. Weidenbaum later served on boards and government commissions, including one on clean air initiatives formed by President George H. W. Bush, and he continued as director of the Washington University business institute. In 2001 it was renamed the Weidenbaum Center on the Economy, Government and Public Policy.

The center gave him a platform from which to express his views on deficit spending — “I conclude that deficits do not matter, but that Treasury borrowing and money creation surely do” — and on military spending and other economic matters. It also gave him an opportunity to display his dry sense of humor.

Speaking at the center’s annual policy conference in October 1982, he remarked, “At a time when, alas, economist jokes are in vogue, I would like to add my favorite wisecrack about our profession: If all the economists in the world were laid end to end, it might be a good thing.”

 

A version of this article appears in print on March 22, 2014,

on page A22 of the New York edition with the headline:

Murray L. Weidenbaum, Reagan Economist, Dies at 87.

Murray L. Weidenbaum, Reagan Economist, Dies at 87,
NYT,
21.3.2014,
http://www.nytimes.com/2014/03/22/
business/murray-l-weidenbaum-reagan-economist-dies-at-87.html

 

 

 

 

 

When Wealth Disappears

 

October 6, 2013

The New York Times

By STEPHEN D. KING

 

LONDON — AS bad as things in Washington are — the federal government shutdown since Tuesday, the slim but real potential for a debt default, a political system that seems increasingly ungovernable — they are going to get much worse, for the United States and other advanced economies, in the years ahead.

From the end of World War II to the brief interlude of prosperity after the cold war, politicians could console themselves with the thought that rapid economic growth would eventually rescue them from short-term fiscal transgressions. The miracle of rising living standards encouraged rich countries increasingly to live beyond their means, happy in the belief that healthy returns on their real estate and investment portfolios would let them pay off debts, educate their children and pay for their medical care and retirement. This was, it seemed, the postwar generations’ collective destiny.

But the numbers no longer add up. Even before the Great Recession, rich countries were seeing their tax revenues weaken, social expenditures rise, government debts accumulate and creditors fret thanks to lower economic growth rates.

We are reaching end times for Western affluence. Between 2000 and 2007, ahead of the Great Recession, the United States economy grew at a meager average of about 2.4 percent a year — a full percentage point below the 3.4 percent average of the 1980s and 1990s. From 2007 to 2012, annual growth amounted to just 0.8 percent. In Europe, as is well known, the situation is even worse. Both sides of the North Atlantic have already succumbed to a Japan-style “lost decade.”

Surely this is only an extended cyclical dip, some policy makers say. Champions of stimulus assert that another huge round of public spending or monetary easing — maybe even a commitment to higher inflation and government borrowing — will jump-start the engine. Proponents of austerity argue that only indiscriminate deficit reduction, accompanied by reforming entitlement programs and slashing regulations, will unleash the “animal spirits” necessary for a private-sector renaissance.

Both sides are wrong. It’s now abundantly clear that forecasters have been too optimistic, boldly projecting rates of growth that have failed to transpire.

The White House and Congress, unable to reach agreement in the face of a fiscal black hole, have turned over the economic repair job to the Federal Reserve, which has bought trillions of dollars in securities to keep interest rates low. That has propped up the stock market but left many working Americans no better off. Growth remains lackluster.

The end of the golden age cannot be explained by some technological reversal. From iPad apps to shale gas, technology continues to advance. The underlying reason for the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated.

First was the unleashing of global trade, after a period of protectionism and isolationism between the world wars, enabling manufacturing to take off across Western Europe, North America and East Asia. A boom that great is unlikely to be repeated in advanced economies.

Second, financial innovations that first appeared in the 1920s, notably consumer credit, spread in the postwar decades. Post-crisis, the pace of such borrowing is muted, and likely to stay that way.

Third, social safety nets became widespread, reducing the need for households to save for unforeseen emergencies. Those nets are fraying now, meaning that consumers will have to save more for ever longer periods of retirement.

Fourth, reduced discrimination flooded the labor market with the pent-up human capital of women. Women now make up a majority of the American labor force; that proportion can rise only a little bit more, if at all.

Finally, the quality of education improved: in 1950, only 15 percent of American men and 4 percent of American women between ages 20 and 24 were enrolled in college. The proportions for both sexes are now over 30 percent, but with graduates no longer guaranteed substantial wage increases, the costs of education may come to outweigh the benefits.

These five factors induced, if not complacency, an assumption that economies could expand forever.

Adam Smith discerned this back in 1776 in his “Wealth of Nations”: “It is in the progressive state, while the society is advancing to the further acquisition, rather than when it has acquired its full complement of riches, that the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable. It is hard in the stationary, and miserable in the declining state.”

The decades before the French Revolution saw an extraordinary increase in living standards (alongside a huge increase in government debt). But in the late 1780s, bad weather led to failed harvests and much higher food prices. Rising expectations could no longer be met. We all know what happened next.

When the money runs out, a rising state, which Smith described as “cheerful,” gives way to a declining, “melancholy” one: promises can no longer be met, mistrust spreads and markets malfunction. Today, that’s particularly true for societies where income inequality is high and where the current generation has, in effect, borrowed from future ones.

In the face of stagnation, reform is essential. The euro zone is unlikely to survive without the creation of a legitimate fiscal and banking union to match the growing political union. But even if that happens, Southern Europe’s sky-high debts will be largely indigestible. Will Angela Merkel’s Germany accept a one-off debt restructuring that would impose losses on Northern European creditors and taxpayers but preserve the euro zone? The alternatives — disorderly defaults, higher inflation, a breakup of the common currency, the dismantling of the postwar political project — seem worse.

In the United States, which ostensibly has the right institutions (if not the political will) to deal with its economic problems, a potentially explosive fiscal situation could be resolved through scurrilous means, but only by threatening global financial and economic instability. Interest rates can be held lower than the inflation rate, as the Fed has done. Or the government could devalue the dollar, thereby hitting Asian and Arab creditors. Such “default by stealth,” however, might threaten a crisis of confidence in the dollar, wiping away the purchasing-power benefits Americans get from the dollar’s status as the world’s reserve currency.

Not knowing who, ultimately, will lose as a consequence of our past excesses helps explain America’s current strife. This is not an argument for immediate and painful austerity, which isn’t working in Europe. It is, instead, a plea for economic honesty, to recognize that promises made during good times can no longer be easily kept.

That means a higher retirement age, more immigration to increase the working-age population, less borrowing from abroad, less reliance on monetary policy that creates unsustainable financial bubbles, a new social compact that doesn’t cannibalize the young to feed the boomers, a tougher stance toward banks, a further opening of world trade and, over the medium term, a commitment to sustained deficit reduction.

In his “Future of an Illusion,” Sigmund Freud argued that the faithful clung to God’s existence in the absence of evidence because the alternative — an empty void — was so much worse. Modern beliefs about economic prospects are not so different. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear. But as the current fiscal crisis demonstrates, facing the pain will not be easy. And the waking up from our collective illusions has barely begun.

 

Stephen D. King, chief economist at HSBC,

is the author of “When the Money Runs Out:

The End of Western Affluence.”

When Wealth Disappears,
NYT,
6.10.2013,
http://www.nytimes.com/2013/10/07/
opinion/when-wealth-disappears.html

 

 

 

 

 

Krugman Wins Economics Nobel

 

October 14, 2008

The New York Times

By CATHERINE RAMPELL

 

Paul Krugman, a professor at Princeton University and an Op-Ed page columnist for The New York Times, was awarded the Nobel Memorial Prize in Economic Sciences on Monday.

“It’s been an extremely weird day, but weird in a positive way,” Mr. Krugman said in an interview on his way to a Washington meeting for the Group of 30, an international body from the public and private sectors that discusses international economics. He said he was mostly “preoccupied with the hassles” of trying to make all his scheduled meetings on Monday and answer a constantly ringing cellphone.

Mr. Krugman received the award for his work on international trade and economic geography. In particular, the prize committee lauded his work for “having shown the effects of economies of scale on trade patterns and on the location of economic activity.”

He has developed models that explain observed patterns of trade between countries, as well as what goods are produced where and why. Traditional trade theory assumes that countries are different and will exchange different kinds of goods; Mr. Krugman’s theories have explained why worldwide trade is dominated by a few countries that are similar to each other, and why some countries might import the same kinds of goods that it exports.

“There was something very beautiful about the old existing trade theory and its ability to capture the world in a surprisingly simple conceptual framework,” Mr. Krugman said. “And then I realized that some of the new insights coming through in industrial organization could be applied to international trade.”

Mr. Krugman wrote his dissertation, however, on international finance, and credits his professor at M.I.T., Rudiger Dornbusch, with pushing him to study international trade.

“I went to visit him one snowy day in early 1978 and described to him what I’d been thinking about,” Mr. Krugman said. “He turned to me and said, ‘You’ve got to write about that.’ ”

Mr. Krugman has been an Op-Ed columnist at The New York Times since 1999.

“For economists, this is a validation but not news. We know what each other have been up to,” Mr. Krugman said. “For readers of the column, maybe they will read a little more carefully when I’m being economistic, or maybe have a little more tolerance when I’m being boring.”

He said that he did not expect his critics to let him off any more easily because of his new accolade, though.

“I think we’ve learned this when we see Joe Stiglitz writing,” Mr. Krugman said, referring to the winner of the economics Nobel in 2001. “I haven’t noticed him getting an easy time. People just say, ‘Sure, he’s a great Nobel laureate and he’s very smart, but he still doesn’t know what he’s talking about in this situation.’ I’m sure I’ll get the same thing.”

In 1991 Mr. Krugman received the John Bates Clark medal, a prize given every two years to “that economist under 40 who is adjudged to have made a significant contribution to economic knowledge.” He follows several Clark medal recipients who have gone on to win a Nobel, including Mr. Stiglitz.

“To be absolutely, totally honest I thought this day might come someday, but I was absolutely convinced it wasn’t going to be this day,” Mr. Krugman said. “I know people who live their lives waiting for this call, and it’s not good for the soul. So I put it out of my mind and stopped thinking about it.”

He said he did not participate in any of the economics Nobel betting pools , and that he did not know which day the winner’s name would be released until a colleague told him last week.

Mr. Krugman continues to teach at Princeton. This semester he is teaching a small graduate-level course on international monetary policy and theory, covering such timely subjects as international liquidity crises. In recent years he has also taught courses on the welfare state and international trade, as well as all-freshman seminars on various economic topics.

Monday’s award, the last of the six prizes, is not one of the original Nobels. It was created in 1968 by the Swedish central bank in Alfred Nobel’s memory. Mr. Krugman was the sole winner of the award this year, which includes a prize of about $1.4 million.

Krugman Wins Economics Nobel,
NYT,
14.10.2008,
http://www.nytimes.com/2008/10/14/business/economy/14econ.html

 

 

 

 

 

 

 

 

 

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