Krugman on economic recovery

Krugman concludes in 1999: ‘…how does one get the economy going again? To date most actual efforts have focused on bank restructuring and recapitalization but if this model is on the right track, this will not be sufficient. The main problem at this point, the model suggests, is that firms and entrepreneurs who drove investment and growth before the crisis are now effectively bankrupt and unable to raise capital.’

Quote from ‘Balance Sheets, The Transfer Problem, And Financial Crises

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