[lbo-talk] Reflections on the current crisis 2

Michael Pollak mpollak at panix.com
Sat Mar 22 21:04:37 PDT 2008


On Fri, 21 Mar 2008, Doug Henwood wrote:


> I've just posted a quickie piece on the current crisis to:
>
> <http://www.leftbusinessobserver.com/Turmoil2.html>

Great piece!

One question. You say the Swedes spent 2% of their GDP fixing their banking problem (which would be roughly equal to $300B for the US today). Krugman, saying he was citing Reinert and Rogoff, put the figure at 6%:

http://krugman.blogs.nytimes.com/2008/03/17/forbidden-swedes/

<quote>

(according to Reinhart and Rogoff) the resolution of Sweden's financial crisis imposed a fiscal burden -- that is, required a taxpayer-financed bailout -- equal to 6 percent of GDP. That would be $850 billion in America today.

<unquote>

Any idea offhand where the discrepancy comes from?

Michael



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