Structural Lessons for & from Economics

Posted on Saturday, January 10, 2009 at 1:57 pm

daron_acemoglu.jpgD. Acemoglu: [T]he greater danger from an expectational trap and a deep recession lies elsewhere. We may see consumers and policymakers start believing that free markets are responsible for the economic ills of today and shift their support away from the market economy. We would then see the pendulum swing too far, taking us to an era of heavy government involvement rather than the needed foundational regulation of free markets. I believe that such a swing and the anti-market policies that it would bring would be the real threat to the future growth prospects of the global economy. See here. (HT: Econlog)