Essays On The Great Depression Review

The Great Recession in the Shadow of the Great Depression: A Review Essay on "Hall of Mirrors: The Great Depression, The Great Recession and the Uses and Misuses Of History"

Lee E. Ohanian

NBER Working Paper No. 22239
Issued in May 2016
NBER Program(s):Economic Fluctuations and Growth

This essay reviews Barry Eichengreen's recent book that compares the Great Depression and the Great Recession. Eichengreen focuses on deficient aggregate demand as the key reason for why both downturns were so deep and why they lasted so long. I assess the book's arguments regarding the causes and consequences of these episodes from a neoclassical perspective. I provide an alternative framework for analyzing these episodes, and argue that a key difference between the 1930s and today reflects the factors that continued to depress both economies after their respective troughs. The post-Depression economy featured rapid productivity growth, whereas today's economy is plagued by low productivity growth. I discuss how the post-Great Depression economy recovered to trend quickly once policies that depressed competition were removed. I also argue that returning today's economy to trend may be considerably more challenging.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w22239

Published: Lee E. Ohanian, 2017. "The Great Recession in the Shadow of the Great Depression: A Review Essay on , by Barry Eichengreen," Journal of Economic Literature, vol 55(4), pages 1583-1601.

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Essays on the Great Depression3.67 · Rating details ·  73 Ratings  ·  3 Reviews


Few periods in history compare to the Great Depression. Stock market crashes, bread lines, bank runs, and wild currency speculation were worldwide phenomena--all occurring with war looming in the background. This period has provided economists with a marvelous laboratory for studying the links between economic policies and institutions and economic performance. Here, Ben B
Few periods in history compare to the Great Depression. Stock market crashes, bread lines, bank runs, and wild currency speculation were worldwide phenomena--all occurring with war looming in the background. This period has provided economists with a marvelous laboratory for studying the links between economic policies and institutions and economic performance. Here, Ben Bernanke has gathered together his essays on why the Great Depression was so devastating.
This broad view shows us that while the Great Depression was an unparalleled disaster, some economies pulled up faster than others, and some made an opportunity out of it. By comparing and contrasting the economic strategies and statistics of the world's nations as they struggled to survive economically, the fundamental lessons of macroeconomics stand out in bold relief against a background of immense human suffering. The essays in this volume present a uniquely coherent view of the economic causes and worldwide propagation of the depression.
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Hardcover, 320 pages

Published April 24th 2000 by Princeton University Press (first published 2000)

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