Paul Krugman: 'Strong Chance' U.S. Economy Will Worsen

06/03/2011 10:01 am ET | Updated Aug 03, 2011
  • Paul Krugman The New York Times

Earlier this week, the Federal Reserve Bank of New York published a blog post about the “mistake of 1937,” the premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression. As Gauti Eggertsson, the post’s author (with whom I have done research) points out, economic conditions today — with output growing, some prices rising, but unemployment still very high — bear a strong resemblance to those in 1936-37. So are modern policy makers going to make the same mistake?

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