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The book is all about “A lucid and punchy analysis of
the dangers posed by global financial markets and a
wake – up call for complacent or economically ignorant
Paul Krugman is an extremely knowledgeable professional
economist, an excellent writer, and an incisive critic of what
international economic policymakers are doing wrong.
Paul Krugman received the Nobel Prize in economics in 2008. He is
a prolific scholar, and teaches economics and international affairs at
Princeton University. Fortune magazine claims that he “writes better
than any economist since John Maynard Keynes,” and the
Economist describes him as “probably the most creative economist
of his generation.”
The book traces the history of financial crises throughout the world
starting from the 1930s.
It analyze the crisis that ever happened and the reasons of the crisis.
It talks about the collapse of socialism and the triumph of
He says that the collapse began in china.
During the past decade it was as though a violent tornado descended
on the global capitalist system, wreaking devastation wherever it
It analyses the two great economic disasters of the 1990s. The Japan
and the Britain .
In 1995 in Mexico, the so-called tequila crisis caused one of the
worst recessions to hit an individual country since the 1930s.
When neighboring countries devalued their currencies, Hong Kong
suddenly became correspondingly expensive. The result was a
In 1997 the devaluation of Thailand’s currency triggered a financial
avalanche that buried much of Asia.
Within 3 months after devaluation of Thailand Indonesia was in even
worse shape than the rest of Southeast Asia, indeed on its way to one
of the worst economic slumps in world history
Japan has spent most of the past decade in a slump, alternating brief
and inadequate periods of economic growth with ever-deeper
In the summer of 1998 Russia’s financial situation unraveled faster
than expected. Indeed, for a few weeks it looked as if Russia’s
financial collapse would drag down the whole world.
At the time of writing it seems clear that Brazil is now set for a crisis
at least as bad as Thailand’s or Korea’s.”
The root causes of all of these crises lie in sudden changes in
international investors' opinions.
currency , rising
interes rates ,
From the book we understood that we can have a recession even
when an economy seems to be basically sound.
Recession is a natural component of business cycle.
Problem of business cycle can be tamed by modern economic
In boom people should be encouraged to save
He failed to explain the way of recovery for the people who are
already suffered from such Financial Crisis.