Paul Krugman: It’s pretty clear that the blockbuster paper of the International Monetary Fund conference will be one that focuses on the evidence that by tolerating high unemployment we have inflicted huge damage on our long-run prospects. According to the paper, our seemingly endless slump has done long-term damage: he long-term unemployed seen as unemployable; business investment lags thanks to weak sales; new businesses don’t get started; and existing businesses skimp on research and development. The authors suggest that economic weakness has already reduced America’s economic potential by around 7 percent, which means that it makes us poorer to the tune of more than $1 trillion a year — for multiple years.
Posted on: Fri, 08 Nov 2013 08:35:42 +0000
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