Encyclopedia of Opinion
Question
How do we think about the shock therapy approach to economics?
Position‹2 of 2

Shock therapy doesn't work

The case that shock therapy does not work: that markets rest on institutions no decree can create quickly, that removing controls first rewards capture over productivity, and that compressing the adjustment decides who pays for it.

Supporting arguments · 2

  1. Markets need institutions that cannot be built at the speed of a decree
  2. Compressing the adjustment concentrates its cost on those least able to bear it