The Other Half of Macroeconomics and the Fate of Globalization, authored by Richard C. Koo and published by Wiley in 2018, challenges conventional economic wisdom by highlighting the crucial but often overlooked aspects of macroeconomics. The book addresses the profound credibility crisis faced by economists after the 2008 Great Recession, where policymakers failed to predict or adequately respond to the economic downturn despite unprecedented monetary interventions. Koo argues that understanding and integrating what he terms “the other half of macroeconomics” is essential for formulating effective policies in today’s post-industrial economies.

By delving into the dynamics of debt overhangs and balance sheet recessions, Koo provides a fresh perspective on why traditional economic theories fall short when applied to contemporary global economic challenges. He emphasizes the need for policymakers to recognize these unique economic phenomena and adapt their strategies accordingly to address issues such as stagnation and rising income inequality.

The book aims to offer practical insights into devising appropriate measures that can help overcome the current difficulties faced by advanced economies, including slow wage and productivity growth. It is an essential read for economists, policymakers, and anyone seeking a deeper understanding of today’s complex economic landscape.