4th January 2012
It’s familiar territory for Krugman. Back in 2009, he posited that the world economy’s economic indicators showed we were half way towards the 1930s depression.
Krugman notes – correctly – that depressions experience ebbs and flows. They are not linear phases of constant decline. They have periods of growth. In 2010, Krugman argued we were in the “early phases of a third depression”, which may threaten democratic governance itself. In 2011, have we turned the corner, or are things getting worse?
Glad you asked. In his seminal 1973 work, The World in Depression 1929–39, the great financial historian Charles Kindleberger outlined his theory of hegemonic stability as a counterpoint to Keynesian and monetarist explanations of the Great Depression.