It’s a tribute to the importance of Friedman’s work that questions about his legacy bear so directly on contemporary policy issues. But for that reas… - Paul Krugman

Why did the magic economy go away? Hundreds of books have been written on that topic. This isn't one of them ― although I'll devote part of a chapter to some plausible stories and take a number of stabs at the issue along the way. But let me cut to the chase: the real answer is that we don't know. There are a lot of stories out there. Most of them, including the ones that have achieved the widest currency, are dead wrong on logical or factual grounds. There are some less popular stories that could be right ― but if you are honest with yourself, you will admit that nobody, yourself included, knows which if any of these stories actually is right.

Whether the influence of increasing returns on trade and geography is rising or falling, one thing is clear: much was learned from the intellectual revolution that brought increasing returns into the heart of how we think about the world economy. It wasn't just that economists could make sense of previously puzzling data, we found ourselves able to see things that had previously been in an intellectual blind spot. Many people contributed to this process of enlightenment; I'm proud to have been a part of the journey.

If growth in East Asia is indeed running into diminishing returns, however, the conventional wisdom about an Asian-centered world economy needs some rethinking.