Tuesday, December 3, 2013
A Permanent Slump?
http://www.nytimes.com/2013/11/18/opinion/krugman-a-permanent-slump.html?_r=0 Due 9 December 2013. What are the reasons we may have a permanent slump, according to Krugman? What are his comments about Larry Summers' view of the economy?
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The imagine that speculations along these lines are the province of a radical fringe. And they are indeed radical; but fringe, not so much. A number of economists have been flirting with such thoughts for a while. And now they’ve moved into the mainstream. a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between was made forcefully recently at the most ultrarespectable of venues, the I.M.F.’s big annual research conference. And the person making that case was none other than Larry Summers.
ReplyDeleteAccording to Krugman, the norm of a persistently depressed economy may be related to the slow population growth that has been generally consistent since the times of the baby boomers. The work force dramatically increased as the baby boomers began to age and women were beginning to be allowed to work. Another cause of the current persistent slump Krugman says may be the constant trade deficit that has only increased since the 1980s. Krugman agrees with Larry Summers that this persistent slump in the economy may be the new norm for us. The financial crisis that initially caused the depression are far behind us now but other factors are keeping us in the shadows.
ReplyDeleteKrugman says our recession is caused by the slowing population growth. The baby boomer generation gave the U.S. what seemed like an unstoppable labor force. The peak of economic success came when they had developed their careers in the 70s and 80s during Reagan's administration especially. Since then, economic success has not been the same. It's simply a part of the population deficit. Larry Summers says it may become the new norm and Krugman agrees with this emphatically.
ReplyDeleteOur spending and our current economy status is being viewed as being the new normal instead of just a "phase" We may be facing what is going on for the next 10 or even 20 years instead of it just being a minor setback. This so-called permanent slump may be happening, according to Krugman, because of the baby boomers and the persistent trade deficits. People's views on depression and their actions, such as trying to save more results in a worse off economy in the long run which doesn't help the economy at all. Krugman agrees with Larry Summers when he states that this may be the new normal for us and that "it is not over until it is over" Krugman also states that this may occur for a very long time.
ReplyDeleteThe permanent slump krugman is referring to is the baby boomers and the persistent trade deficits. People are saving more instead of buying more. This is bad for the long run because of how there is no money being circulated into the market. Larry Summers basically said this slump we are in is the new normal and Krugman agreed and also added that this is going to go on for awhile. What we are going through now in this new “normal” may be around for the next 20 years.
ReplyDeleteWe have a permanent slump because of population growth that has been generally consistent since the times of the baby boomers and persistent trade deficits, says Krugman. Our spending and our current economy status is being viewed as being the new normal instead of simply just a phase. Krugman agreed with Larry Summers' comments about this being the new normal, that the financial crisis that started the Great Recession is now far behind us, his comment about the crisis not being over until its over, before the crisis we had a huge housing and debt bubble, and also that this may go on for a while.
ReplyDeleteAccording to Krugman, the permanent slump is perpetuated by the general consistency of population growth since the times of the baby boomers, and persistent trade deficits. Krugman agreed with Summers comments of the slump being the new normal. Krugman also expanded upon Larry's comments by adding that this will persist for quite some time. This slowing population growth is not going to radically change anytime soon, which is reaffirmed by both Summers and Krugman.
ReplyDeleteKrugman believes the permanent slump the economy is in is because of the baby boomers and their persistent trade deficits. The slowing population growth has helped create this slump. The economy was at a high point when the baby boomers were becoming of working age and flooding the economy with labor. Now, demand rarely, if ever, comes close to surpassing supply. The trade deficit hindering our economy since the 1980's. Krugman generally agrees with Summers. Summers believes that the mildly depressed state of the economy will slowly become the norm. He believes the trend we've been seeing for the past four years will stay the same for decades. The two economist agree on the fact that this country only seems to reach near full employment when being supported on a bed of financial bubbles. Even though the impacts of the Great Recession are far over, the conditions that we saw may stay the same for many years to come.
ReplyDeleteAccording to Paul Krugman we are in an incessant economic slump because, of our slowing population growth since the baby boomers and also our persistent trade deficits. Krugman agrees with Summers that the financial crisis that started the Great Recession is in the past, yet our economy is still depressed. He also agrees with Summers that our current economy is something we view as the new normal and won't be fixed overnight.
ReplyDeleteAccording to Krugman the reasons we may be in a permanent slump could be slowing population growth. America's baby boomers have grown up and the work force grew. Also it might be because of persistent trade deficits. He agreed with Larry Summers on the point that the financial crisis that started the Great Recession is long gone, but we still remain in a depression. The population growth doesn't seem to be changing anytime soon, either.
ReplyDeleteIn the article, Paul Krugman said that we are in an economic slump because of the slow population growth. US can only prosperous when everyone working and spending. An important factor may be persistent trade deficits, which emerged in the 1980s and since then have fluctuated but never gone away. The evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing. Krugman agrees with Summers's comments that our economy is something that can't be fixed for many years.
ReplyDeleteKrugman explains that America may in a permanent economic slump caused by a slowed growth rate of our population. This means that we will not have sufficient resources to support the Baby Boom generation as we enter the work force and contribute to social security. The population is projected to continue shrinking, only perpetuating the slump America is currently experiencing. Krugman agrees with Summers that our current economy is in a state of constant recession, and furthers that this is due to the fact that household debt has risen greatly per capita since the 1970s.
ReplyDeleteAmericans continue to try save whatever they have instead of re-investing monies into the economy. The American perspective is that with the poor state of the economy, they must “save for a rainy day.”
ReplyDeleteA systematic downturn in population growth after the rise of the 60s/70s baby boomers, has resulted in less demand for housing, schools, office buildings, etc. Without a growth in population the need for manufacturing, sales, and industry decreases resulting in a consistently unstimulated economy.
Krugman also states that since the 1980s, America has plagued with persistent trade deficits with no end in sight.
As interests rates continue to hover in the single digits, central money are pursuing exit strategies unconventional monetary policy. Policy makers as well as the average American are concerned about deflation as these rates stay abnormally low. In turn, market expectations are also down and that determines the economic reaction of the country at large.
American economist, Larry Summers stated in a recent conference at the IMF, that perhaps the U.S. economy is in a “permanent slump.” Secular stagnation is not an outcome of a business cycle but is a permanent condition. Mr. Krugman appears to agree with Mr. Summer’s opinion. Summers offers an example of how the economy has been unsuccessful in producing full employment when the debt and housing bubble was at its largest. The financial bubble was supposed to help stimulate the economy but failed to do so and the U.S. economy remained mediocre at best. Now more than four years after this bubble burst, our economy continues to remain depressed. Krugman also agrees that it is impossible to stimulate the economy when interest rates are almost at 0.
For the most part, Mr. Krugman agrees with Mr. Summer’s assessment of the current state of the U.S. economy. The consensus is that there are far too many moving pieces that must fall into place to overcome this permanent slump. For now, they agree that the economy “is what it is” and we must learn to live with in this state of slump for many years to come.
According to Krugman, our slumpish state is caused by a slow growth rate in our population. Simply put, the way we're headed, we will not be able to support the Baby Boomers as we, the younger generations, begin to work and contribute to social security. Seeing as the population is projected to keep shrinking, it feels as if the slump is quicksand, slowly bringing us down. Krugman agrees with Summers' current assessment of our measly economy. It seems as though it is the task of the younger generation, not to get us out of this slump, but to learn how to live through it.
ReplyDeleteKrugman asserts that the permanent slump has been caused by a decreasing rate of population growth. In the 70s and 80s, when the baby boomers were ready to work, and women began to leave the role of the perfect wife and began to work also, the growth of jobs and even the housing market was exponentially increased. Furthermore, Krugman finds constant trade may also be a hindrance to growth. Krugman praises Sumner’s beliefs in this blog and another (in which he claims to “hate” Sumner with “professional jealousy” for being so well versed while explaining the concept.
ReplyDeleteAccording to Krugman, a permanent slump is due to the slowing population growth since the times of the baby boomers generation and persistent trade deficits. Usually when spending increases it is classified as a “phase”, but it seems that our worsening economy with overspending has become the new normal for the United States. Krugman agrees with Summers of this; our economy is in a constant recession and will not be able to be fixed for many years. It began with a financial crisis, but now there are many other factors affecting our weakening economy.
ReplyDeleteAccording to Krugman we are in an incessant economic slump because, of our slowing population growth since the baby boomers as well as our persistent trade deficits. Krugman agrees with Summers in that the financial crisis that started the Great Recession is in the past, but our economy is still in a depression. He also agrees that the current status of our economy is displayed as the new normal and it is not possible to be fixed overnight, so it may be around for another 20 somewhat years.
ReplyDeleteAccording to Krugman, we may have a permanent slump because many people are saving their money due to economic complications. With the baby boom, the U.S saw a promising labor force. But with the baby boom population now heading into retirement, there are less people to be a part of the labor force. His comments about Larry Summers' view of the economy are that he agrees with him, and that the economy, although well beyond the economic depression in the 20th century, will suffer like it is suffering now for many years in the future.
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Krugman suggests that the permanent economic slump may be due to slowing population growth. Less people to spend money on the housing market and baby boomers sticking around in the labor force making less room for younger people. Krugman comments that Summers' ideas may be relevant for a long time coming if he is right. That current respectable economists may have been wrong all this time and will stay wrong.
ReplyDeleteAccording to Krugman, we are stuck in a permanent slump, a state where near depression is the economic norm for the foreseeable future. He believes this is caused by factors such as inadequate demand where the only bursts in demand and employment come from housing bubbles. This can possibly be attributed to slowing population growth. The aging Baby Boomers were the last generation of a huge population where rapid demand was created for housing and office buildings. Another reason could be increasing trade deficits. Krugman appears to agree with Summers’s opinion regarding the economy, that the economy is in a permanent slump, in a non-changing rut of constant recessions.
ReplyDeleteAccording to Krugman, a permanent slump is due to the slowing population growth since the times of the baby boomers generation and persistent trade deficits, which have only increased since the 1980s. Larry Summers believes that the slump that the country has been in for the past 4 years now will become the new norm for the U.S. Krugman more or less agrees with Summers' prediction.
ReplyDeleteThe reasons we may have a permanent slump would be because we have adopted secular stagnation a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between. This is what Larry Summers said because our society has become extremely mainstream;: The financial crisis that started the Great: The financial crisis that started the Great Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed.t Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed. According to Krugman the norm now is to be economically correct.
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