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GLOBAL warming could have the same economic effect as the Great Depression
GLOBAL warming could have the same economic effect as the Great Depression if handled poorly, according to the Rudd Government's climate change adviser Ross Garnaut.
Professor Garnaut has written an article saying that poor design of climate change policies or slowness in implementing them could spell the end of what he calls the Platinum Age.
The economist's article, published in the Australian National University's biannual Asian-Pacific Economic Literature, says unexpectedly large climate change impacts on fragile political systems could bring about sharp downturns in economies.
The effects of the 1890s depression in eastern Australia, the global Great Depression of the 1930s and the financial crisis in Indonesia in 1997 were examples of what could happen if climate change impacts hit hard, he says.
GLOBAL warming could have the same economic effect as the Great Depression if handled poorly, according to the Rudd Government's clima... more -
Great Depression to Come Again?
Sinister outcasts from Princeton's economist Krugman - He expects the US housing market to drop 25% overall.
"I'm not one of those people who thinks the Great Depression is coming back, but there's lots of echoes. [...] I think we know more than we did then, and just the fact that we have a big federal government is a stabilizing factor. But the current problem is still pretty awesome."
At the same time, he admits that "what we're having looks like a minor-key version of the bank failures in the early 1930s. Now it's mostly not banks, it's markets that were serving the function of banks and institutions that were doing banklike stuff, and it's not as bad - at least so far. But it's a question. If we were actually having a string of bank failures, then we would know what to do. The government would essentially seize the banks and guarantee the deposits. But what do you do when you have a wave of failures of things like the auction-rate securities market, which was effectively a funny way of doing banking? If you look historically at other financial crises, they typically end up with big government bailouts. But how's that going to work in this case? We don't even know who to bail out. And part of the problem is we don't even know who owes what to whom."
I am wondering if today they really know more about troubles in the financial markets than in the 30's. The situation seems to be very different today - notwithstanding the perplexity about the economy's inner workings, which then as now seems do dominate. Not comforting, I would say...
What do you think? Sinister outcasts from Princeton's economist Krugman - He expects the US housing market to drop 25% overall. ... more
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Great Depression
