What have we learned from the credit crisis? A lecture by Paul Krugman, my hero. Here are the main extracts: This crisis is any many ways similar to the 30s one Crisis tend to occur when we forget about previous crisis We forgot that banks were unstable (and therefore needed to be regulated). This is mainly targeted at the Americans In the Great Depression, the Fed did not even try to expand the monetary base. In this respect, Bernanke did much better. Big government with all its flows has the advantage of being an "automatic stabilizer" in periods of crisis. Financial crisis have long lasted consequences (cf. "This time is different" by Carmen Reinhart and Kenneth Rogoff). There is a risk that we remove economic stimulus too early and the economy to plunge back into recession.
