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Saturday, August 13, 2011

Romer: The Hope That Flows From History

Christina Romer tells policymakers to learn the lessons of history, lessons that show the way out of the recession, and then act accordingly:

The Hope That Flows From History, by Christina Romer, Commentary, NY Times: After the grim economic developments of the last few weeks, it’s easy to lose hope. Could the Great Recession of 2008 drag on for years, just as the Great Depression did in the 1930s? Adding to the despair is the oft-repeated notion that it took World War II to end the economic nightmare of the ’30s: If a global war was needed to return the economy to full employment then, what is going to save us today?
Look more closely at history and you’ll see that the truth is much more complicated — and less gloomy. While the war helped the recovery from the Depression, the economy was improving long before military spending increased. More fundamentally, the wrenching wartime experience provides a message of hope for our troubled economy today: we have the tools to deal with our problems, if only policy makers will use them. ...[read more]...

    Posted by on Saturday, August 13, 2011 at 10:08 AM in Economics, Fiscal Policy | Permalink  Comments (29)


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