The important lesson of the deficit is - and the national debt - is we have to be careful about how we're spending money.

In the early 1990s, there was a debate among economists over shock therapy versus a gradualism strategy for Russia. The people in Russia who believed in shock therapy were Bolsheviks a few people at the top that rammed it down everybody's throat. They viewed the democratic process as a real impediment to reform.

The life prospects of an American are more dependent on the income and education of his parents than in any of the other advanced industrial countries.

Much of my work in this period was concerned with exploring the logic of economic models, but also with attempting to reconcile the models with everyday observation.

World War II was really unusual, because America was in the Great Depression before. So the war did help the US economy to get securely out of this decline. This time, the war [in Iraq] is bad for the economy in both the short and long run. We could have spent trillions in research or education instead. This would have led to future productivity increases.

I think that for the developing world there are many versions of capitalism, and countries have to choose one that's appropriate.

The country that's been most successful at that is Norway. The more typical countries are those in the Middle East where a small group seizes those resources, uses it to buy arms to make sure that they can oppress the remainder, and you get these great inequalities. So Canada is among the better performing of the natural resource economies, but it's still not up to the best performing.