Business, Finance & Economics

Krugman on the economy

(We just heard about some econiomists arguing growth is unsustainable. What are your thoughts?) Growth is a good thing�do we even want to go back to the outlook of a generation ago when hundreds of thousands of people in India and China had hopeless outlooks? Growth is not an unmitigated good and there are negative side effects, but it's far better to have economic progress than not. (How likely is it we'll see any growth?) In the short run, very unlikely, this is a serious recession, the worst financial crisis in 75 years. (But things will get better) In the long run we will work our way through this, but I'm a pessimist for the next two or three years. Beyond that, I'm an optimist, and we'll rebuild. (What will it take between countries around the world to improve the near-term?) We need financial rescues along the line of what's just starting now, but we'll need more and need to have them be better focused. We need capital for banks and guarantees and general strengthening of the system�and it needs to be global. Contagion of financial distress is global, and it needs a global solution. (What can people expect a deep recession to look like?) It's tougher than people would think. We've been living in a great moderation. A lot of people are going to be hurting, a serious lack of job of opportunities, this could be as bad as the early �80s slump which was painful. (In your experience, is Western green a universal value?) We harness greed but we don't worship it. Will society police greed so it doesn't overrun its value? A little bit of greed can be good.

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