OxAn says History Suggests a Downturn but No Depression
Taking an historical perspective on the current economic cycle, Oxford Analytica says it looks more like the sharp downturn of 1937 than the Great Depression.
“The asset boom/bust nature of today’s downturn is reminiscent of the 1929-33 business cycle,” OxAn says in History suggests downturn not depression. “Low interest rates and quiescent inflation accommodated both booms. Yet the 1937 US downturn has greater resonance for today. Thanks to a buoyant international economy, with ‘decoupled’ emerging markets, this episode did not engender another depression. Instead, US and world growth responded to aggressive US monetary and fiscal stimuli.”
Overshadowed in historical recollection by the Great Depression and Second World War, the late 1930s saw a dramatic US recession that had the makings of another global depression. Yet the sharp US downturn, which itself was quickly reversed, did not badly affect the world economy. Parallels with today are striking.
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April 11th, 2008 at 11:42 am
[...] most interested in the historical perspective. Top post of the week was Oxford Analytica’s History Suggests a Downturn but No Depression, which found striking similarities between the current economic situation and and the 1937 [...]