A New Recession? What Went Wrong

In his latest book, Nobel laureate economist Paul Krugman argues that the global economy is on the brink of a new recession. He warns that the combination of rising interest rates, trade wars, and political uncertainty is creating a perfect storm that could lead to a downturn.

The Global Economy is in Trouble

Krugman begins by laying out the evidence that the global economy is slowing down. He points to the recent decline in global trade, the slowdown in China's economy, and the rising cost of living in many countries. He argues that these factors are all contributing to a loss of confidence in the global economy, which is leading to a decrease in investment and spending.

The Fed is Raising Interest Rates

One of the biggest factors contributing to the slowdown in the global economy is the Federal Reserve's decision to raise interest rates. The Fed has raised interest rates three times in the past year, and it is expected to raise them again in the coming months. This is making it more expensive for businesses to borrow money, which is leading to a decrease in investment.

Trade Wars are Disrupting Global Supply Chains

Another factor contributing to the slowdown in the global economy is the Trump administration's trade wars. The tariffs that the Trump administration has imposed on goods from China and other countries are disrupting global supply chains and raising the cost of goods for consumers. This is leading to a decrease in demand for goods and services, which is further slowing down the global economy.

Political Uncertainty is Weighing on the Global Economy

The final factor contributing to the slowdown in the global economy is political uncertainty. The rise of populism and nationalism around the world is creating uncertainty about the future of the global economy. This uncertainty is leading to a decrease in investment and spending, which is further slowing down the global economy.

A New Recession is Coming

Krugman argues that the combination of these factors is creating a perfect storm that could lead to a new recession. He warns that the global economy is on the brink of a downturn, and that policymakers need to take action to prevent it.

What Can Be Done to Prevent a Recession?

Krugman offers a number of policy recommendations to prevent a recession. He argues that the Fed should stop raising interest rates, the Trump administration should end its trade wars, and governments around the world should invest in infrastructure and other measures to stimulate the economy.

Conclusion

Krugman concludes by arguing that the global economy is at a crossroads. He warns that if policymakers do not take action to prevent a recession, the global economy could be headed for a downturn. However, he also argues that there is still time to act, and that with the right policies, the global economy can be put back on track.

Why You Should Read This Book

A New Recession? What Went Wrong is a must-read for anyone who is interested in the global economy. Krugman provides a clear and concise analysis of the current state of the global economy, and he offers a number of policy recommendations to prevent a recession. This book is essential reading for anyone who wants to understand the challenges facing the global economy and what can be done to address them.