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Economic Depressions
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Chart 1: Comparison of Per Capita Income, 1971-80 and 1991-95 Why is Argentina, a country that was often praised for its reforms and cited as an example for other emerging economies, suffering one of the most severe economic depressions of its history? If the best student is in deep trouble after having done what the teacher advised, what awaits the rest?
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This perspective, spawned by the depression and by Keynes's theories, focuses on the interaction of aggregate economic variables, including consumption, investment, and the money supply. Only fairly recently have some macroeconomists begun to consider how other factors, such as technological innovation, would influence the level of economic activity.
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When the world’s only super power plans to fight economic depression by distributing $600 or so checks to its citizens increasing budget deficit, it is sad. The sudden lowering of short term rates by Fed, the stimulus package and other means of injecting artificial liquidity in the market is wrong. It will create inflationary pressures, the yield on long end of the Treasury will rise and the economic depressions intensify.
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The notion that expansion through military conquest would solve Japan's economic problems gained currency during the Great Depression of the 1930s. It was argued that the rapid growth of Japan's population—which stood at close to 65 million in 1930—necessitated large food imports. To sustain such imports, Japan had to be able to export.
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[E]conomically substantial innovation of entire new industries is clearly evident during the between phase depressions about the years 1790, 1890, and 1975. These are more or less the dates that most people use when they are thinking about "industrial revolutions."
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