FACT: “In the years before 1981 (the end of the Volcker recession) recessions in the United States were relatively frequent, about one every five years. The National Bureau of Economic Research (NBER) committee defined nine recessions between 1945 and 1981, two of which (those of the early 1970s and the double-dip recession of 1980-1981) were both long and severe. By contrast, the period from 1981 to 2007 was one of long expansions and short recessions. In the entire period, there were only two recessions, in 1990-91 and 2001, and each lasted only eight months.”
Zombie Economics: How Dead Ideas Still Walk among Us
by John Quiggin
In the graveyard of economic ideology, dead ideas still stalk the land.
The recent financial crisis laid bare many of the assumptions behind market liberalism—the theory that market-based solutions are always best, regardless of the problem. For decades, their advocates dominated mainstream economics, and their influence created a system where an unthinking faith in markets led many to view speculative investments as fundamentally safe. The crisis seemed to have killed off these ideas, but they still live on in the minds of many—members of the public, commentators, politicians, economists, and even those charged with cleaning up the mess. In Zombie Economics, John Quiggin explains how these dead ideas still walk among us—and why we must find a way to kill them once and for all if we are to avoid an even bigger financial crisis in the future.
Zombie Economics takes the reader through the origins, consequences, and implosion of a system of ideas whose time has come and gone. These beliefs—that deregulation had conquered the financial cycle, that markets were always the best judge of value, that policies designed to benefit the rich made everyone better off—brought us to the brink of disaster once before, and their persistent hold on many threatens to do so again. Because these ideas will never die unless there is an alternative, Zombie Economics also looks ahead at what could replace market liberalism, arguing that a simple return to traditional Keynesian economics and the politics of the welfare state will not be enough—either to kill dead ideas, or prevent future crises.
“Entertaining and thought-provoking. . . . [W]orks as a good summary for non-specialists of how the economics debate has developed.”—Philip Coggan, Economist
“Quiggin is a writer of great verve who marshals some powerful evidence.”—Financial Times (FT Critics Pick 2010)
We invite you to read the Introduction here: http://press.princeton.edu/chapters/i9270.pdf