The Return of Depression Economics

This book is a newly revised and updated version of Mr. Krugman’s 1999 book “The Return of Depression Economics.”

On the last page of this newly updated book, Mr. Krugman says, “The quintessential economic sentence is supposed to be ‘There is no free lunch’: it says that there are limited resources, that to have more of one thing, you have to accept less of another.” He goes on to say that “depression economics is the study of situations where there is a free lunch.”

He talks about economic crisis that have hit Mexico, Asia, Argentina, and elsewhere over the past 30 years and how they got out of it.

In the closing chapters, he explains how this new financial crisis is similar to, and different from, all those that have come before it and how, in his opinion, that another Great Depression isn’t likely, and how similar methods of getting out of previous slumps can help propel us out of this one.

In my opinion, this book is extremely readable by someone who doesn’t have much experience in matters of economy. Mr. Krugman explains large economic problems using simple, easy to visualize examples, most of which use a DC-area babysitting co-op.

Mr. Krugman was the 2008 winner of the Nobel Prize in Economics for his work in New Trade Theory.

Official Book Website