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Paul Krugman: 2 ideas worth knowing

2 ideas from Paul Krugman, each explained in a minute and credited to the original work. Free on Savvy.

• Krugman showed why an industry clusters in one city instead of spreading out evenly

  Paul Krugman's 'new trade theory' explained a pattern classical economics struggled with: industries often cluster tightly in one region, like cars in Detroit or tech in Silicon Va…

  — Paul Krugman, Increasing Returns and Economic Geography

• Japan's 1991 asset bubble burst into a stagnation that still hasn't fully ended

  When Japan's real-estate and stock bubble collapsed in the early 1990s, banks sat on mountains of bad loans instead of writing them off, and growth stalled for years. Paul Krugman …

  — Paul Krugman, It's Baaack: Japan's Slump and the Return of the Liquidity Trap

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