Working Papers

Economic Doom Mongering as Bad Movie Cliché

Is current account and budget deficit angst just a bad Oliver Stone movie cliché?  BlogginWallStreet quotes Gordon Gekko in Wall Street:

Well ladies and gentlemen, we’re not here to indulge in fantasies, but in political and economic reality. America has become a second rate power. Our trade deficit and fiscal deficit are at nightmare proportions.

If it was a movie cliché in 1987, it must surely be getting pretty long in the tooth in 2005.  Plus ca change…

posted on 15 September 2005 by skirchner in Economics

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who, exactly, are the first rate powers?

Posted by .(JavaScript must be enabled to view this email address)  on  09/15  at  05:58 PM

It wasn’t exactly doom, but resolving these imbalances (much smaller than the present ones) took some hefty tax increases and a big recession.

Posted by quiggin  on  09/19  at  09:00 AM

But did the imbalances cause the S&L debacle (a regulatory failure), the first Gulf War and associated oil shock and an excessively tight monetary policy?  Recessions are always possible, but they generally reflect exogenous shocks or policy mistakes.

Posted by skirchner  on  09/19  at  01:47 PM

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