If Krugman is Right–Coral Gables is in Trouble
August 27, 2010 Leave a comment
I have thought all along that the stimulus package was never enough and that we are going to pay a dear price for a sluggish economy, even if it is technically not a recession (two quarters of a declining economy)
The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.