The Great (Credit) Contraction

Kenneth Rogoff, a professor of economics at Harvard, has an essay in Project Syndicate this week that argues the following:

"The phrase "Great Recession" creates the impression that the economy is following the contours of a typical recession, only more severe - - something like a really bad cold . . . But the real problem is that the global economy is badly overleveraged, and there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation . . ."