How’d We Get Into This Mess?
Raghuram G. Rajan offers a concise macroeconomic history of the past 60 years and some possible prescriptions for the issues that ail governments across the globe:
In fact, today’s economic troubles are not simply the result of inadequate demand but the result, equally, of a distorted supply side. For decades before the financial crisis in 2008, advanced economies were losing their ability to grow by making useful things. But they needed to somehow replace the jobs that had been lost to technology and foreign competition and to pay for the pensions and health care of their aging populations. So in an effort to pump up growth, governments spent more than they could afford and promoted easy credit to get households to do the same. The growth that these countries engineered, with its dependence on borrowing, proved unsustainable…
>> For more see Foreign Affairs