Barry Eichengreen (c) Edward Caldwell

Barry Eichengreen

The Great Depression and a Great Recession

May/
Sat 23 May 2015

Barry Eichengreen

The Great Depression and a Great Recession

Barry Eichengreen (c) Edward Caldwell
Sat 23 May 2015,

The two great financial crises of the past century are the Great Depression of the 1930s and the Great Recession, which began in 2008. Both occurred against the backdrop of sharp credit booms, dubious banking practices, and a fragile and unstable global financial system. When markets went into cardiac arrest in 2008, policymakers invoked the lessons of the Great Depression in attempting to avert the worst. While their response prevented a financial collapse and catastrophic depression like that of the 1930s, unemployment in the US and Europe still rose to excruciating high levels. Pain and suffering were widespread. The question, given this, is why didn’t policymakers do better?

Barry Eichengreen’s twinned history of the two crises provides the farthest-reaching answer to this question to date. Alternating back and forth between the two crises and between North America and Europe, Eichengreen shows not just how the “lessons” of Great Depression history continue to shape society’s response to contemporary economic problems, but also how the experience of the Great Recession will permanently change how we think about the Great Depression.

Image credit: Edward Caldwell

 

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