Politics of stagnation

The recent economic news has been worrisome, with a growth slowdown, a collapse in investment activity, fiscal stress and a weakening rupee. The global economy also seems to have magneto trouble, a phrase used by John Maynard Keynes to describe the economic crisis of the 1930s. A quick rebound like the one we saw in 2009 seems unlikely. Unlike two years ago, no major government in the world has the fiscal firepower to support effective demand.

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