Rarely do teachers of economics have such a rich feast on which to draw. Many thoughtful people worried about rising income inequality and some political leaders called for the end of capitalism and the dawn of a new economic order in which tighter regulation reigned in unfettered greed. In the five years since the subprime mortgage crisis of August 2007 moved economics from the business report to the front page, justified fear has gripped producers, consumers, financial institutions, and governments.Д®ven the idea that the market is an efficient mecha- nism for allocating scarce resources came into question. And there is uncertainty about fiscal policy as a one trillion dollar deficit approaches a fiscal cliff and interacts with an aging population and rising health-care costs to create a national debt time bomb. There is extraordinary uncertainty about monetary policy with the Fed having tripled the quantity of bank reserves and continuing to create more money in an attempt to stimulate a flagging economy but providing no guidance about its eventual exit strategy from stimulus. There is uncertainty about exchange rate policy as competitive devaluation rears its head.

There is uncertainty about the way in which international trade policy will evolve as protectionism is returning to the political agenda. The major source of this great uncertainty is economic policy.

But at some times, and now is one such time, the range of possible near-future events is enormous.

Michael parkin economics pdf