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A Manifesto For Economic Sense
Are we doomed to repeat the past? Even when we know better? Or do we not know better even when we should?
As economic crises persist around the world, mainstream economic theory has been unable to provide the solutions that will get us back on track, a situation reminiscent of the Great Depression. Paul Krugman (Princeton University) and Richard Layard’s (London School of Economics) recent Manifesto for Economic Sense offers a diagnosis. “The reason is simple,” they write. “We are relying on the same ideas that governed policy in the 1930s.”
The manifesto has garnered support from leading economists around the world, providing the latest manifestation of the obvious problem – that economic theory is not in great shape and is not providing the solutions our societies need to grapple with persistent economic dysfunction. Just as in the 1930s, the market economy is not demonstrating a natural tendency toward full employment when left unattended. Rather, like in the 1930s, developed economies show signs of being in a slump and a low-level liquidity trap, as was described by Keynes.
It's an interesting read - and if you broadly agree, you can sign the Manifest online. See: www.manifestoforeconomicsense.org .