Krugman: Collapse in Trade Worse than the Great Depression

Paul Krugman told the New York Times:

“When it comes to international trade, actually it’s not the Great Depression, it’s worse,” he said, presenting charts showing the decline in global trade activity falling much more steeply in the current downturn than during the Depression.

“The scale of the collapse of world trade has been so large that it has produced a degree of international linkage that surpasses what even the pessimists imagined,” he said. “World trade acted as a transmission mechanism,” spreading economic distress “even to those countries that had relatively healthy financial systems,” such as Germany.

“We really are one world economy in a way that has never been true before,” he said.

On a lighter note, Krugman through out these one-liners:

  • Perhaps trade with China in recent years hasn’t been so unfair to the U.S., he joked: “They send us poisoned toys and tainted seafood and we send them toxic securities.”
  • On the need for regulation: “Ground beef is like asset-backed securities — you really don’t know what’s in that burger.”
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  • http://Anonymousnoreply@blogger.com Anonymous

    "global trade activity falling much more steeply in the current downturn than during the Depression."You have to remember that ships were slower back then.

  • http://Anonymousnoreply@blogger.com Anonymous

    "On a lighter note, Krugman through out these one-liners:"I'm willing to bet he -threw- them out, and than called the garbage men to come get them.

  • http://www.blogger.com/profile/17066440544129368326 Bill Bergman

    The GDP accounts subtract imports from exports to get to net exports. It's fun and illuminating to add exports and imports together, not subtract imports from exports, and look at the growth in the sum of those to look at trade relating to the United States alone. This chart shows a dramatic decline in recent years, along the lines of what Krugman was saying. But things may finally be pulling out.

 

 

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