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June 17, 2009 1:53amby Martin Wolf | Share
Green shoots are bursting out. Or so we are told. But before concluding that the recession will soon be over, we must ask what history tells us. It is one of the guides we have to our present predicament. Fortunately, we do have the data. Unfortunately, the story they tell is an unhappy one.
Two economic historians, Barry Eichengreen of the University of California at Berkeley and Kevin O’Rourke of Trinity College, Dublin, have provided pictures worth more than a thousand words. In their paper, Profs Eichengreen and O’Rourke date the beginning of the current global recession to April 2008 and that of the Great Depression to June 1929. So what are their conclusions on where we are a little over a year into the recession? The bad news is that this recession fully matches the early part of the Great Depression. The good news is that the worst can still be averted.
First, global industrial output tracks the decline in industrial output during the Great Depression horrifyingly closely. Within Europe, the decline in the industrial output of France and Italy has been worse than at this point in the 1930s, while that of the UK and Germany is much the same. The declines in the US and Canada are also close to those in the 1930s. But Japan’s industrial collapse has been far worse than in the 1930s, despite a very recent recovery.
- Great Depression vs Great Recession: American Perspectives (wealthvest.com)
- Ten Key Differences between the Current Recession and the Great Depression (wealthvest.com)
- Christina Romer’s Comparison of the Great Depression vs. Today’s Great Recession (wealthvest.com)
- Great Depression vs Great Recession: Bruce Bartlett (wealthvest.com)
- The Great Depression – More Government or Less for Today’s Great Recession (wealthvest.com)
- The Great Depression: American Century’s View (wealthvest.com)
- Great Recession needs Great Depression-era tactic (wealthvest.com)
- The Great Depression and the Great Recession – Thinking Back to Franklin D Roosevelt (wealthvest.com)
- Great Depression (1929-1933) vs. Great Recession (2007-2009) (wealthvest.com)
- Great Depression vs. Great Recession: Devaluation, Unemployment, Global Trade-Everything (wealthvest.com)