Handout: Prof. Krugman on the Macroeconomic Problem

Paul Krugman comments on the current macroeconomic scenario (as Professor Delong calls him – “THE EXPLAINER”):

Basically, I’d say, the problem is twofold. First, in the mid-00s the U.S. economy got badly unbalanced — too much dependence on housing and housing-inflated consumer spending, too big a trade deficit.

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Second, in the process we also got a credit bubble that’s now bursting, and threatening to take down spending that wasn’t all that high to begin with — like business investment. [link]

An interesting commentary, and something which you IAS 107-‘ers should be able to understand by now (I hope).

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