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"And Now the Great Depression"
Economist's View — ... And Now the Great Depression, by Barry Eichengreen, Vox EU: A couple of months ago at lunch with a respected Fed watcher, I asked, “What are the odds are that US unemployment will reach 10% before the crisis is over?” “Zero,” he responded, in an admirable display of confidence. Watchers tending to internalize the outlook of the watched, I took this as reflecting opinion within the US central bank. We may have been in the throes of the most serious credit crisis since the Great Depression, but nothing resembling the Depression itself, when US unemployment topped out at ...

A Very Large Invisible College Indeed: Analogies to teh Great Depression
J. Bradford DeLong's Grasping Reality with All Eight Tentacles — ... From Wall Street to Main Street: Lessons from the Great Depression: A couple of months ago at lunch with a respected Fed watcher, I asked, “What are the odds are that US unemployment will reach 10% before the crisis is over?” “Zero,” he responded, in an admirable display of confidence. Watchers tending to internalise the outlook of the watched, I took this as reflecting opinion within the US central bank.... The Fed and Treasury were on the case. US economic fundamentals were strong. Comparisons with the 1930s were overdrawn. ...

Five decades of evidence on financial crisis and recession: How long? How Deep?
VoxEU.org: Recent Articles — Although the unprecedented events of the past few weeks in financial markets have dominated the headlines, the debate will inevitably shift to how the most severe financial crisis in modern times impacts the broader economy, and, if recessions in major advanced countries were to occur, how long and how deep these will be. There are already indications that the spillovers from the financial crisis to the broader economy will not be mild in fact, activity in the US and several other advanced economies has slowed down in recent months. The unique nature of the current financial crisis combining a house price bust, a credit crunch, and an ...

Episode V: Expectations strike back
VoxEU.org: Recent Articles — Do you remember Luke Skywalker s challenge to become a Jedi in The Empire Strikes Back ? Luke had to enter a dark,foggy cave and fight evil foes. What Luke did not know is that these foes would be materialisations of his own apprehensions. Empowered by the Force, Luke killed the materialisation of his arch-enemy. But that was not the purpose of the challenge. The real purpose was to teach Luke that the Force lies less in the sword than in the mind. Luke should have turned off his lightsabre and focused his mind. By quelling his own fears, monsters and enemies would have receded. That victory, Luke had to achieve. These fictional ...