Summary of "Zombie Economics"
How Dead Ideas Still Walk Among Us
by John Quiggin
• Economic theories continue to live as “zombie ideas” even after events refute them.
• The 2008 “Global Financial Crisis” exposed the fallacy of five hard-to-kill principles that fueled “market liberalism”:
• First, beginning in the 1990s, “the Great Moderation” claimed business cycles had stilled.
• Second, the “Efficient Markets Hypothesis” assumed markets have perfect information.
• Third, full employment fell away under “Dynamic Stochastic General Equilibrium,” which says that free markets would determine labor and capital allocations.
• Fourth, “trickle-down economics” said that enriching the wealthy benefits everyone.
• And fifth, “privatization” advocates said government cannot run an economy as well