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the_return_of_depression_economics [2010/07/06 13:36]
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the_return_of_depression_economics [2010/07/06 13:00] (current)
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 These were the wrong lessons. ​ It was not appreciated that the errors in Mexican policy-making,​ although real, were out of all proportion to the scale of the crisis --- it seemed like an exceptionally severe punishment for such misdemeanours. ​ Moreover, the rescue had been achieved primarily by a sleight of hand by the Treasury over Congress'​ disapproval --- hardly an indication that a robust international system was working. ​ And in the Mexican case the political relationship was easily managed --- the US was particularly anxious to assist an economy which is too close to its borders to be allowed to fail, and Mexican politicians were not above asking for help from Washington and accepting a little policy direction. ​ Perhaps above all, there was a failure to understand just how lucky the rescue package had been in the effect that it had had --- in truth there was little genuine reason to believe that intelligent policy intervention had been a more decisive factor than dumb luck in getting things back on track. These were the wrong lessons. ​ It was not appreciated that the errors in Mexican policy-making,​ although real, were out of all proportion to the scale of the crisis --- it seemed like an exceptionally severe punishment for such misdemeanours. ​ Moreover, the rescue had been achieved primarily by a sleight of hand by the Treasury over Congress'​ disapproval --- hardly an indication that a robust international system was working. ​ And in the Mexican case the political relationship was easily managed --- the US was particularly anxious to assist an economy which is too close to its borders to be allowed to fail, and Mexican politicians were not above asking for help from Washington and accepting a little policy direction. ​ Perhaps above all, there was a failure to understand just how lucky the rescue package had been in the effect that it had had --- in truth there was little genuine reason to believe that intelligent policy intervention had been a more decisive factor than dumb luck in getting things back on track.
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 ====== The Future That Didn't Work: Japan in the 1990s ====== ====== The Future That Didn't Work: Japan in the 1990s ======
  
-Japan'​s economy was very successful in the period 1953-73, growing at around 9 per cent per annum, the most rapid sustained industrial growth that had then been recorded, even faster than the early years of Stalinism. ​ This success didn't really gain attention from the West until it was already decaying; from 1973 onwards growth slowed suddenly --- at the same time as it did throughout much of the world --- to around 4 per cent.  Although debate on Japan'​s success was not particularly timely, it was extensive. ​ Opinion divided into two main camps:+Japan'​s economy was very successful in the period 1953--73, growing at around 9 per cent per annum, the most rapid sustained industrial growth that had then been recorded, even faster than the early years of Stalinism. ​ This success didn't really gain attention from the West until it was already decaying; from 1973 onwards growth slowed suddenly --- at the same time as it did throughout much of the world --- to around 4 per cent.  Although debate on Japan'​s success was not particularly timely, it was extensive. ​ Opinion divided into two main camps:
  
   - Those who believed that Japan'​s successes could be explained by classical economic theory --- that what had happened essentially boiled down to '​getting economic fundamentals right',​ and   - Those who believed that Japan'​s successes could be explained by classical economic theory --- that what had happened essentially boiled down to '​getting economic fundamentals right',​ and
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