For millennia, a country’s level of prosper was defined by the state of the economy. The country’s consumption, production level and its money supply are the key factors that determine whether or not the economy is healthy. Historically, a healthy economy was following by increasing country ou tputs, consumers’ willingness to spend, thus increasing producers’ investment and decreasing unemployment rate. The US’s economy has experiences several depressions in the history; the most recent depression happened during 2008, when the housing and financial market crashed in the US. During the depression, a lot of economists seem had their own opinions or theories about how to help the US out of the depression. In this book review, the major debate and issues represented in Paul Krugman's (2013) book “End This Depression Now” will be discussed. There are some analyses of key ideas of different scientists reflected in the book. Much attention is also devoted to the review of the US economic history and disagreement from some economists for the principles of Keynesian theory.
Policy, Ideas and Measures
The book "End This Depression Now" (Krugman, 2013) insists that contemporary economic challenges should be viewed from the position of practical ability rather than from analytical polemics. It argues that contemporary policy makers and economists must think of what should be done today which will lead to a consequences tomorrow. The author disputes that we should not think so hard of what has caused the current state of the economy, but what we should do to cure it from the ills of the previous hits.
Krugman(2013) is using this book as the warning to the public and state officials to understand the reality of contemporary economic challe...
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...Krugman’s modern findings.
Works Cited
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Krugman, Paul. End This Depression Now. New York: W.W.Norton and Company, 2013.
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Smith, Y. Bill Greider on Why Paul Krugman Was So Wrong, 2 April 2013. Available at: [08 February 2014].
During the 1920’s, America was a prosperous nation going through the “Big Boom” and loving every second of it. However, this fortune didn’t last long, because with the 1930’s came a period of serious economic recession, a period called the Great Depression. By 1933, a quarter of the nation’s workers (about 40 million) were without jobs. The weekly income rate dropped from $24.76 per week in 1929 to $16.65 per week in 1933 (McElvaine, 8). After President Hoover failed to rectify the recession situation, Franklin D. Roosevelt began his term with the hopeful New Deal. In two installments, Roosevelt hoped to relieve short term suffering with the first, and redistribution of money amongst the poor with the second. Throughout these years of the depression, many Americans spoke their minds through pen and paper. Many criticized Hoover’s policies of the early Depression and praised the Roosevelts’ efforts. Each opinion about the causes and solutions of the Great Depression are based upon economic, racial and social standing in America.
The American economy struggling originates from people taxing themselves as a result of idleness, pride, and folly, leading to a downward economic spiral. For the economy to return to a low unemployment rate and little to no debt people may want to read “The Way to Wealth” in order to learn about industry and how to avoid future money mistakes. Franklin wrote a persuasive sermon in order to convince people to change the financial status created from idleness, pride and folly. In the modern society American people need to create a stable economy for both themselves and the future generations. In order to understand the importance of unemployment rates and debt rates in comparison to Franklin’s “The Way to Wealth” idleness, pride and folly must be analyzed in
Since being founded, America became a capitalist society. Being a capitalist society obtains luxurious benefits and rather harsh consequences if gone bad. In a capitalist society people must buy products and spend money to keep the economy balanced, but once those people stop spending money, the economy goes off balance and the nation enters a recession. Once a recession drastically takes a downturn, the nation enters what is known as a depression. In 2008 America entered a recession and its consequences were severe enough for some people, such as President Barack Obama, to compare the recent crisis to the world’s darkest economic depression in history, the Great Depression. Although the Great Depression and the Great Recession of 2008 hold similarities and differences between the stock market and government spending, political issues, lifestyle changes, and wealth distribution, the Great Depression proved far more detrimental consequences than the Recession.
From the many economy-related books available I read The Return of Depression Economics by Paul Krugman. This book was written during the Asian financial crisis of the late 1990’s. Many say that Krugman wrote this book much too quickly to be fully correct on every issue that he wrote about in this book. Krugman mainly focuses on financial crises of the 1990’s and mostly on the Asian financial crisis. This book was very interesting to read even though I did not fully understand every issue he covered. In this book Krugman laid out the basic fundamentals of global economy and the choices we had to get ourselves out of the Asian financial crisis. With the Asian financial crisis done and over with, many of Krugman’s thoughts and choices are now out-of-date. Even though there were an option at the time but now dated, they were interesting and I agreed on many of his points. Krugman believes that Mexico’s crisis was a three-act play with Mexico as act one, Asia as number two and us finishing off as act three.
Despite its size, only 190 pages, the authors address the basic concepts of economics while also applying those politically and for personal finance decision making. Those basic concepts include scarcity, gains from trade, marginal decision-making, profit management, income growth, and Adam Smith’s invisible hand theories are all discussed within the first part of the book; allowing readers to understanding the concepts, Gwartney applies the same concepts to the creation of wealth and the importance of competition, private property, open trade, monetary stability, and lower taxes. This book educates its audience by evaluating our economy and government mechanisms without the overpowering display of charts, formulas, and graphs; which you would typically see in a textbook allow...
Krugman, Paul The Age of Diminished Expectations: U.S. Economic Policy in the 1990s. Cambridge: MIT Press, 1990
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One of the most recognized Capitalist economists after the Great Depression was John Maynard Keynes who advocated for the government intervention on behalf of Capitalism to provide an economic stimulus. He opposed the populist ideas from other economists who believed markets would fix themselves, stating that “insufficient demand would lead to growing unemployment” (2011. Welna, David) and would create a cycle of misery. He believed that capitalism would end from lack of buyers, sellers, producers, demand, employment opportunities, and money being exchanged in the economy. His beliefs were embraced by the US, although, government failed to follow his advice on using this only as a short term solution. Since then our National debt has risen to trillions of dollars.
The US government’s role in the Great Depression has been very controversy. Different hypothesizes argued differently on the causes of the Great depression and whether the New Deal introduced by the government and President Roosevelt helped United States got out of the depression. I would argue that even though not the only factor, the US government did lead the country into the Great Depression and the New Deal actually delayed the recovery process. I will discuss five different factors (stock market crash, bank failure, tariff and tax cut, consumer spending and agriculture) that are commonly accepted to cause the depression and how the government linked to them. Furthermore, I will try to show how the government prolonged the depression in the United States by introducing the New Deal.
But economically, Roosevelt and his “brains trust” had no idea what they were doing. They attempted one failed intervention after another. The Great Depression was a disaster, and sadly an avoidable one.” (Edwards, 2005)
Polanyi, Karl. "Societies and Economic Systems," "The Self Regulating Market and Fictitious Commodities: Labour, Land, and Money." "The Great Transformation. Boston: Beacon Press, 1957. pp. 43-55, 68-75
The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique for thinking, which helps the possessor to draw correct conclusions. The ideas of economists and politicians, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." (John Maynard Keynes, the General Theory of Employment, Interest and Money p 383)
Friedman, Milton. An Economist's Protest: Columns in Political Economy. Glen Ridge] N.J.: T. Horton, 1972. 6-7. Print.
Ferguson, S (1999) Keynesian Theory and its implication, College of Management and Economics, Canada University, 298-312
Sullivan, A., & Steven M., (2003). Economics: Principles in action. Upper Saddle River, New Jersey : Pearson Prentice Hal