The economic crisis is historic, not another great depression, say experts: NPR

0
98


Unemployed workers wait outside the New York State Labor Office in 1933. The current economic crisis has drawn comparisons to the Great Depression, but experts say the slowdown should be shorter.

AP

hide legend

toggle legend

AP

Unemployed workers wait outside the New York State Labor Office in 1933. The current economic crisis has drawn comparisons to the Great Depression, but experts say the slowdown should be shorter.

AP

As the US economy plummets, many forecasters have dug deep into history books, looking for cues on what to expect. Often, they turned to the chapter of the 1930s.

“It is clear that people have made comparisons with the Great Depression,” said former Federal Reserve chairman Ben Bernanke.

“It is not a very good comparison,” he warned.

Bernanke, who is a student of the Great Depression, says the crisis was triggered by a financial crisis and made worse by bad political choices, including the decision of his Fed predecessors to raise interest rates.

Perhaps most importantly, the depression lasted a dozen years. Although Bernanke does not expect to rebound from the current crisis in the next six months, he also does not see him stretching indefinitely.

“If all goes well in a year or two, we should be in a much better position,” said Bernanke at a hearing at the Brookings Institution last month.

This optimistic view is supported by a different historical example from more than a decade before the Great Depression: the 1918 flu pandemic, after which the US economy rebounded relatively quickly.

“I think there is a lot to hope for,” said Carola Frydman, economic historian at the Kellogg School of Management.

LEAVE A REPLY

Please enter your comment!
Please enter your name here