“The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone—horrors!—printing money) can ever be a good idea. Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms—especially when it gives them a chance to lecture others on their failings.”

—  Paul Krugman

"The Hangover Theory", Slate (Dec. 4, 1998)

Adopted from Wikiquote. Last update June 3, 2021. History

Help us to complete the source, original and additional information

Do you have more details about the quote "The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments…" by Paul Krugman?
Paul Krugman photo
Paul Krugman 106
American economist 1953

Related quotes

Virginia Woolf photo

“Thought and theory must precede all salutary action; yet action is nobler in itself than either thought or theory.”

Virginia Woolf (1882–1941) English writer

Sometimes ascribed to Virginia Woolf, but it appeared as early as 1854 in Anna Jameson's A Commonplace Book of Thoughts, Memories and Fancies, where it is ascribed to William Wordsworth.
Misattributed

William Wordsworth photo

“Thought and theory must precede all action that moves to salutary purposes. Yet action is nobler in itself than either thought or theory.”

William Wordsworth (1770–1850) English Romantic poet

Attributed by Anna Jameson in her A Commonplace Book of Thoughts, Memories and Fancies (1854).

Michael J. Sandel photo
Aron Ra photo
David Gross photo
Robert Skidelsky photo

“Keynes was an applied economist who turned to inventing theory because the theory he had inherited could not properly explain what was happening.”

Robert Skidelsky (1939) Economist and author

Source: John Maynard Keynes: 1883-1946: Economist, Philosopher, Statesman (2003), Ch. 27. Portraits of an Unusual Economist

“The only consolation he drew from the present chaos was that his theory managed to explain it.”

Source: V. (1963), Chapter Seven, Part VII
Context: He had decided long ago that no Situation had any objective reality: it only existed in the minds of those who happened to be in on it at any specific moment. Since these several minds tended to form a sum total or complex more mongrel than homogeneous, The Situation must necessarily appear to a single observer much like a diagram in four dimensions to an eye conditioned to seeing the world in only three. Hence the success or failure of any diplomatic issue must vary directly with the degree of rapport achieved by the team confronting it. This had led to the near obsession with teamwork which had inspired his colleagues to dub him Soft-show Sydney, on the assumption that he was at his best working in front of a chorus line.
But it was a neat theory, and he was in love with it. The only consolation he drew from the present chaos was that his theory managed to explain it.

Laura Mersini-Houghton photo

“If gravity is a fundamental force, then it has to be explained by an expanded version of general relativity, a more complete, a more fundamental theory. Whether that is quantum gravity of something more radical that requires a paradigm shift like, for instance, our research in multiverse theory, nobody knows at the moment.”

Laura Mersini-Houghton (1969) Albanian cosmologist and theoretical physicist

[Why Is Gravity So Elusive? Frank Wilczek, Erik Verlinde, Laura Mersini-Houghton, 4 December 2017, YouTube, https://www.youtube.com/watch?v=7lui9qZ6cDs] 11:20 of 40:44

Related topics