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Posts Tagged ‘Panic of 1873’

Paul Krugman Earns Immediate Induction into Sense on Cents Hall of Shame

Posted by Larry Doyle on June 28th, 2010 9:48 AM |

Paul Krugman today sends a serious shot across the bow of those who believe in fiscal prudence and real sense on cents. Krugman, a widely read and highly respected Princeton economist writes in The New York Times, The Third Depression:

Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses. (more…)






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