Krugman getting Channel Theory?

But this did mean that no amount of depreciation would be expansionary? No; as I wrote in a little paper at the time, once everyone who could go bankrupt had, any further depreciation would be expansionary. So a sufficiently large depreciation could restore full employment.

If the macro economy reduces rank, lets the yield curve steepen, then we have more stable, but less precise, distribution. Households and firms increase in size and perform more specialization internally.  Overall the channel operates with more noise and less capacity (Shannon), so some default happens as the channel no longer has capacity to support debt service.

We have a name for this, Channel Theory.