In this insightful work, celebrated economist Richard C. Koo explores his concepts of balance sheet recession and global competition for capital to explain the prolonged duration of the Great Recession and the ineffectiveness of traditional policies. Koo argues that advanced economies transitioned from a "golden era" to a "pursued era" of economic development decades ago, yet the policy discussions remain rooted in outdated assumptions still prevalent in universities. This disconnect has resulted in an over-reliance on monetary policy and insufficient focus on fiscal policy, exacerbating inequality and distorting economies. Drawing on real-world examples from his extensive policy involvement across various countries, including the U.S., Koo delineates the appropriate policy mix for the pursued era, contrasting it with that of the golden era. He addresses the challenges faced by central banks in combating inflation after a decade marked by excessive reliance on monetary policy and unprecedented liquidity. The book confronts the complexities of economic growth and recession, highlighting the crucial relationship between their drivers. Additionally, Koo emphasizes the need to reconcile free trade with free capital movements to optimize globalization's benefits while mitigating its drawbacks. Written in accessible language and with urgency, this work is essential for anyone concerned about the global economy, financial stability,
