Paul Krugman: [Now] the run-up to the [90s] Asian crisis bore a close family resemblance to the run-up to the crisis now afflicting Greece, However, the crisis countries of 1997 had their own currencies, which proceeded to drop sharply against the dollar.The result was a severe economic contraction. Fortunately, the bad times didn’t last all that long — soon all of them were experiencing strong export-led recoveries. Still, the crisis should have been seen as an object lesson in the instability of a deregulated financial system. Instead, Asia’s recovery led to an excessive showing of self-congratulation on the part of Western officials. The message was, don’t worry, we’ve got these things under control. Eight years later, we learned just how misplaced that confidence was. Indeed,we’re actually doing much worse this time around.
Posted on: Fri, 30 Aug 2013 07:55:15 +0000
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