Depression Economics

I finished reading this book from Paul Krugman. I have really enjoyed it. It is short book and got me hooked. And it is much more easier to read the Keynes book… that was proper hardcore. He explains the crisis we have seen in XIX and XX in a way that you dont need to be economist.

It is really interesting the connections of the economic crisis globally and how complex it is getting everything. It seems the only power that the governments have is print money and play with the interest rates. And it is clear that there is no a perfect system and we will carry on seeing crisis like this. There were some big figures in the economic world that said there will not be more macro economical crisis anymore. And it is funny how the IFM hasn’t followed the practices to improve economies from countries in crisis, they have made things worse.

The baby setting Co-Op is a great example that is used in several parts of the book so explain the type of crisis in that scenario. Really useful.

And seems he is honest, he doesnt have the explanations for all crisis. For example for the Asia crisis of the late 90s, he uses the psychological concept that investors put all countries is Asia in the same basket and treated some countries with stronger economies like weakest one.

And Keynes is mentioned several times. It is clear he was great (although I didnt understand much from his book).

It is clear that things that behave like a bank and they are not bank, they should play by the same rules to protect consumers and avoid crisis like the 2008.

And how important is the confidence. Even well run banks can go down extremely easy when there is a “run on the bank” (people want to take the money out of the bank). It is like a domino effect.

As in Mandelbrot book, it is impossible to foresee the economy long run… And Keynes says that in the long run we are dead.

Enjoy the moment.