Monday, August 22, 2011

Big trouble ahead - |

Big trouble ahead - | “The world economy is now in the grips of a damaging feedback loop involving deteriorating fundamentals, lagging policy responses and destabilized financial markets. If policymakers do not act boldly, and do so in a globally coordinated fashion, the world risks slipping into a prolonged recession with worrisome institutional, political and social consequences”.

Very nice summary of the global financial mess, and the reasons some of the best minds are pessimistic. The focus on aggregate demand rather than distribution is unfortunate, but that reflects the dominant economic paradigm. The world is awash in excess supply....

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