--- title: "Meaning & Key Takeaway of: When depression economics prevails, the…" description: "\"When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.\" —..." image: "https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png" --- # When depression economics prevails, the usual rules of… ![“When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.” quote by Paul Krugman](https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png) [Download](https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png) [Open image](https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png) > “When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.” [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. In severe downturns, standard policies fail; what is usually good becomes harmful. **In simple terms:** Economic rules change in crises; good can become bad. Key Takeaway Adapt policies to crisis realities. Themes economics crisis policy morality Mood analytical cautious Type advisory philosophical When to use this quote - Government budgeting - investment decisions - personal finance Key Concepts Moral hazard risk management Questions to Reflect On - When should you ignore usual economic advice? - How to balance caution and action? A Different Perspective Traditional advice may worsen outcomes. ★ ★ ★ ★ ★ No ratings yet [Caution](https://sms4smile.com/quotes/about/caution/) [Customer](https://sms4smile.com/quotes/about/customer/) [Economic policy](https://sms4smile.com/quotes/about/economic-policy/) [Economics](https://sms4smile.com/quotes/about/economics/) [Folly](https://sms4smile.com/quotes/about/folly/) [Prudence](https://sms4smile.com/quotes/about/prudence/) [Vices](https://sms4smile.com/quotes/about/vices/) [Virtue](https://sms4smile.com/quotes/about/virtue/) ## Related quotes > [The world economy is in a nosedive, and understanding what I call "depression economics" - the weird world you get into when even a…](https://sms4smile.com/quotes/paul-krugman/the-world-economy-is-in-a-nosedive-and-understanding-what-i-call/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [All courses of action are risky, so prudence is not in avoiding danger (it's impossible), but calculating risk and acting decisively. Make mistakes of…](https://sms4smile.com/quotes/niccolo-machiavelli/all-courses-of-action-are-risky-so-prudence-is-not-in-avoiding-danger/) [Niccolo Machiavelli](https://sms4smile.com/quotes/author/niccolo-machiavelli/) > [Debates go on to this day about what caused the Great Depression. Economics is not very good at explaining swings in economic activity.](https://sms4smile.com/quotes/eugene-fama/debates-go-on-to-this-day-about-what-caused-the-great-depression/) [Eugene Fama](https://sms4smile.com/quotes/author/eugene-fama/) > [There is no economic policy. That's really important to say. The general modus operandi of the Bushies is that they don't make policies to…](https://sms4smile.com/quotes/paul-krugman/there-is-no-economic-policy-that-s-really-important-to-say-the/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [ That was an exception within the \[Barack\] Obama administration's economic policy, a crisis that he inherited from the previous administration, and felt it was… ](https://sms4smile.com/quotes/judy-woodruff/that-was-an-exception-within-the-barack-obama-administration-s/) [Judy Woodruff](https://sms4smile.com/quotes/author/judy-woodruff/) > [And judging what is appropriate or not appropriate for a country, I think it is important in particular in judging what is the appropriate…](https://sms4smile.com/quotes/lucas-papademos/and-judging-what-is-appropriate-or-not-appropriate-for-a-country-i/) [Lucas Papademos](https://sms4smile.com/quotes/author/lucas-papademos/) > [Look at what Bush has done. The economy took an incredible hit after September 11. That was a huge shock to the economy. And…](https://sms4smile.com/quotes/christine-o-donnell/look-at-what-bush-has-done-the-economy-took-an-incredible-hit-after/) [Christine O'Donnell](https://sms4smile.com/quotes/author/christine-o-donnell/) > [For a nation, the choices that determine whether income doubles in one generation or two dwarf all other economic policy concerns.](https://sms4smile.com/quotes/paul-romer/for-a-nation-the-choices-that-determine-whether-income-doubles-in-one/) [Paul Romer](https://sms4smile.com/quotes/author/paul-romer/) > [Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant…](https://sms4smile.com/quotes/john-kenneth-galbraith/mr-david-stockman-has-said-that-supply-side-economics-was-merely-a/) [John Kenneth Galbraith](https://sms4smile.com/quotes/author/john-kenneth-galbraith/) > [We have the most flexible and adaptive economy. Making sure we sustain the ability of the American economy to perform well is really the…](https://sms4smile.com/quotes/john-w-snow/we-have-the-most-flexible-and-adaptive-economy-making-sure-we-sustain/) [John W. Snow](https://sms4smile.com/quotes/author/john-w-snow/) > [I think that one of the things that we all agree to is that the touchstone for economic policy is, does it allow the…](https://sms4smile.com/quotes/barack-obama/i-think-that-one-of-the-things-that-we-all-agree-to-is-that-the/) [Barack Obama](https://sms4smile.com/quotes/author/barack-obama/) > [Good economic policy requires not so much the bravado to implement drastic change as the strength and wisdom to make reasonable trade-offs over the…](https://sms4smile.com/quotes/peter-blair-henry/good-economic-policy-requires-not-so-much-the-bravado-to-implement/) [Peter Blair Henry](https://sms4smile.com/quotes/author/peter-blair-henry/) > [I have always believed that the ultimate purpose of economic policies and development policy is to meet the basic needs of our people. And…](https://sms4smile.com/quotes/manmohan-singh/i-have-always-believed-that-the-ultimate-purpose-of-economic-policies/) [Manmohan Singh](https://sms4smile.com/quotes/author/manmohan-singh/) > [In a normal time, I don't think economic policy makes a large difference one way or another. But in times of crisis it makes…](https://sms4smile.com/quotes/mark-zandi/in-a-normal-time-i-don-t-think-economic-policy-makes-a-large/) [Mark Zandi](https://sms4smile.com/quotes/author/mark-zandi/) > [The corporation is not an independent "person" with its own rights, needs, and desires that regulators must respect. It is a state created tool…](https://sms4smile.com/quotes/joel-bakan/the-corporation-is-not-an-independent-person-with-its-own-rights/) [Joel Bakan](https://sms4smile.com/quotes/author/joel-bakan/) ## More by Paul Krugman > [People who are complaining about the Fed are people who've been predicting runaway inflation for five and six years, and it hasn't happened.](https://sms4smile.com/quotes/paul-krugman/people-who-are-complaining-about-the-fed-are-people-who-ve-been/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [Surely I'm not the only person to ask the obvious question: How different, really, is Mr. Madoff's tale from the story of the investment…](https://sms4smile.com/quotes/paul-krugman/surely-i-m-not-the-only-person-to-ask-the-obvious-question-how/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [“The rich are different from you and me: they have more influence.”](https://sms4smile.com/quotes/paul-krugman/the-rich-are-different-from-you-and-me-they-have-more-influence/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [“The Internet’s impact on the economy has been no greater than the fax machine’s….ten years from now, the phrase “information economy” will sound silly.…](https://sms4smile.com/quotes/paul-krugman/the-internet-s-impact-on-the-economy-has-been-no-greater-than-the-fax/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [Not all private equity people are evil. Only some.](https://sms4smile.com/quotes/paul-krugman/not-all-private-equity-people-are-evil-only-some/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [You really have to go searching desperately to find any contemporary examples of good, old-fashioned runaway inflation.](https://sms4smile.com/quotes/paul-krugman/you-really-have-to-go-searching-desperately-to-find-any-contemporary/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [However, the fact that an economist offers a theoretical analysis does not and should not automatically command respect. What is needed is some assurance…](https://sms4smile.com/quotes/paul-krugman/however-the-fact-that-an-economist-offers-a-theoretical-analysis-does/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [Politics determines who has the power, not who has the truth.](https://sms4smile.com/quotes/paul-krugman/politics-determines-who-has-the-power-not-who-has-the-truth/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation and…](https://sms4smile.com/quotes/paul-krugman/the-key-reason-executives-are-paid-so-much-now-is-that-they-appoint/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [I've always believed in expansionary monetary policy and if necessary fiscal policy when the economy is depressed.](https://sms4smile.com/quotes/paul-krugman/i-ve-always-believed-in-expansionary-monetary-policy-and-if-necessary/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [...academic credentials are neither a necessary nor a sufficient condition for having your ideas taken seriously. If a famous professor repeatedly says stupid things,…](https://sms4smile.com/quotes/paul-krugman/academic-credentials-are-neither-a-necessary-nor-a-sufficient/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [It’s not about the budget; it’s about the power...So will the attack on unions succeed? I don’t know. But anyone who cares about retaining…](https://sms4smile.com/quotes/paul-krugman/it-s-not-about-the-budget-it-s-about-the-power-so-will-the-attack-on/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [When stock prices are rising, it's called ''momentum investing''; when they are falling, it's called ''panic.''](https://sms4smile.com/quotes/paul-krugman/when-stock-prices-are-rising-it-s-called-momentum-investing-when-they/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [I don't want a job in the administration; I think I'm more effective carping from the sidelines.](https://sms4smile.com/quotes/paul-krugman/i-don-t-want-a-job-in-the-administration-i-think-i-m-more-effective/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [Under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933.](https://sms4smile.com/quotes/paul-krugman/under-the-gold-standard-america-had-no-major-financial-panics-other/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) [Explore all 175 Paul Krugman quotes ](https://sms4smile.com/quotes/author/paul-krugman/) ## More Caution quotes > [Popular culture as a whole is popular, but in today's fragmented market it's a jostle of competing unpopular popular cultures. As the critic Stanley…](https://sms4smile.com/quotes/mark-steyn/popular-culture-as-a-whole-is-popular-but-in-today-s-fragmented/) [Mark Steyn](https://sms4smile.com/quotes/author/mark-steyn/) > [Ancient eyes had stared at me, filled with ancient grief. And something more. Something so alien and unexpected that I'd almost burst into tears.…](https://sms4smile.com/quotes/karen-marie-moning/ancient-eyes-had-stared-at-me-filled-with-ancient-grief-and-something/) [Karen Marie Moning](https://sms4smile.com/quotes/author/karen-marie-moning/) > [It requires as much to tell the truth as to conceal it.](https://sms4smile.com/quotes/baltasar-gracian/it-requires-as-much-to-tell-the-truth-as-to-conceal-it/) [Baltasar Gracian](https://sms4smile.com/quotes/author/baltasar-gracian/) > [“…there’s nothing in this world that demands more caution than the truth. To tell the truth is like leeching one’s own heart...”](https://sms4smile.com/quotes/umberto-eco/there-s-nothing-in-this-world-that-demands-more-caution-than-the/) [Umberto Eco](https://sms4smile.com/quotes/author/umberto-eco/) > [ \[D\]on't grow old. With age comes caution, which is another name for cowardice… Whatever else you do in life, don't cultivate a conscience. Without… ](https://sms4smile.com/quotes/hesketh-pearson/d-on-t-grow-old-with-age-comes-caution-which-is-another-name-for/) [Hesketh Pearson](https://sms4smile.com/quotes/author/hesketh-pearson/) > [When I became successful, I put up a caution. I didn't think it was fair to have the shadow of that kind of success…](https://sms4smile.com/quotes/robert-redford/when-i-became-successful-i-put-up-a-caution-i-didn-t-think-it-was/) [Robert Redford](https://sms4smile.com/quotes/author/robert-redford/) > [There is one stark fact facing us: three quarters of all crime that results in a caution or sentence happens because of reoffending. We…](https://sms4smile.com/quotes/david-gauke/there-is-one-stark-fact-facing-us-three-quarters-of-all-crime-that/) [David Gauke](https://sms4smile.com/quotes/author/david-gauke/) > [The four cautions: Beware a woman in front of you, beware a horse behind of you, beware a cart beside of you, and beware…](https://sms4smile.com/quotes/jamie-o-neill/the-four-cautions-beware-a-woman-in-front-of-you-beware-a-horse/) [Jamie O'Neill](https://sms4smile.com/quotes/author/jamie-o-neill/) > [“Oh ... why not?' he smiled. "This valley is a pleasant spot for meditation. I like New England... it is here that I have…](https://sms4smile.com/quotes/anonymous/oh-why-not-he-smiled-this-valley-is-a-pleasant-spot-for-meditation-i/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [Fear and caution are two different things. Be cautious - be conscious - but do not be fearful. Fear only paralyzes, while consciousness mobilizes.…](https://sms4smile.com/quotes/neale-donald-walsch/fear-and-caution-are-two-different-things-be-cautious-be-conscious/) [Neale Donald Walsch](https://sms4smile.com/quotes/author/neale-donald-walsch/) > [ “\[U\]se extreme caution, and please remember that 451 degrees Fahrenheit is more than just a book a title…” ](https://sms4smile.com/quotes/ammon-shea/u-se-extreme-caution-and-please-remember-that-451-degrees-fahrenheit/) [Ammon Shea](https://sms4smile.com/quotes/author/ammon-shea/) > [I often found myself in situations where I had, without thinking, said too much to too many with too little caution.](https://sms4smile.com/quotes/john-corey-whaley/i-often-found-myself-in-situations-where-i-had-without-thinking-said/) [John Corey Whaley](https://sms4smile.com/quotes/author/john-corey-whaley/) > [The future is inherently full of discontinuities, and lessons of the past must be applied with enormous caution.](https://sms4smile.com/quotes/zbigniew-brzezinski/the-future-is-inherently-full-of-discontinuities-and-lessons-of-the/) [Zbigniew Brzezinski](https://sms4smile.com/quotes/author/zbigniew-brzezinski/) > [Every human being has, like Socrates, an attendant spirit; and wise are they who obey its signals. If it does not always tell us…](https://sms4smile.com/quotes/lydia-m-child/every-human-being-has-like-socrates-an-attendant-spirit-and-wise-are/) [Lydia M. Child](https://sms4smile.com/quotes/author/lydia-m-child/) > [“Love everyone but chose your friends with caution.”](https://sms4smile.com/quotes/mensah-oteh/love-everyone-but-chose-your-friends-with-caution/) [Mensah Oteh](https://sms4smile.com/quotes/author/mensah-oteh/) [Browse all 640 Caution quotes ](https://sms4smile.com/quotes/about/caution/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.", "creator": { "@type": "Person", "name": "Paul Krugman" }, "isPartOf": { "@id": "https://sms4smile.com/quotes/#website" }, "url": "https://sms4smile.com/quotes/paul-krugman/when-depression-economics-prevails-the-usual-rules-of-economic-policy/", "about": { "@type": "Thing", "name": "Caution" }, "@id": "https://sms4smile.com/quotes/paul-krugman/when-depression-economics-prevails-the-usual-rules-of-economic-policy/#quotation", "image": { "@type": "ImageObject", "@id": "https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png", "contentUrl": "https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png", "url": "https://sms4smile.com/quotes/i/a34/paul-krugman-2255_caution_when-depression-economics-prevails-the-u_1967566.png", "width": 1080, "height": 1080, "caption": "“When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice…” — Paul Krugman", "creditText": "SMS4Smile Quotes", "creator": { "@id": "https://sms4smile.com/quotes/#organization" } } }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://sms4smile.com/" }, { "@type": "ListItem", "position": 2, "name": "Quotes", "item": "https://sms4smile.com/quotes/" }, { "@type": "ListItem", "position": 3, "name": "Paul Krugman", "item": "https://sms4smile.com/quotes/author/paul-krugman/" }, { "@type": "ListItem", "position": 4, "name": "When depression economics prevails, the usual...", "item": "https://sms4smile.com/quotes/paul-krugman/when-depression-economics-prevails-the-usual-rules-of-economic-policy/" } ], "@id": "https://sms4smile.com/quotes/paul-krugman/when-depression-economics-prevails-the-usual-rules-of-economic-policy/#breadcrumb" }, { "@type": "WebSite", "@id": "https://sms4smile.com/quotes/#website", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "publisher": { "@id": "https://sms4smile.com/quotes/#organization" } }, { "@type": "Organization", "@id": "https://sms4smile.com/quotes/#organization", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "logo": { "@type": "ImageObject", "url": "https://sms4smile.com/quotes/wp-content/themes/sq/assets/icons/icon-512.png", "width": 512, "height": 512 } } ] } ```