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Great recessions compared

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  • James Foreman-Peck

    (Cardiff Business School, Cardiff University, Cardiff, United Kingdom)

Abstract

Like the Great Depression of the 1930s, the current great recession triggered strong criticism of economists and economics. It is contended here that economists’ majority opinion rightly recommended that, in the face of collapses of aggregate demand, countercyclical fiscal and monetary policies, built-in stabilisers and a regulatory system to maintain free trade were appropriate remedies. Economists may have under-estimated the stability of markets and the tightness of prudential regulation for reducing the severity of potential crises. But their assessments anyway are likely to be discounted if powerful industry lobbies judge they will constrain profits, rather than boost them. These propositions are developed in a comparison of the two Great Recessions in the United States, the United Kingdom, France and Germany. KEY Classification-JEL: E52. E62. G21

Suggested Citation

  • James Foreman-Peck, 2014. "Great recessions compared," Investigaciones de Historia Económica - Economic History Research (IHE-EHR), Journal of the Spanish Economic History Association, Asociación Española de Historia Económica, vol. 10(02), pages 92-103.
    • Handle: RePEc:ahe:invest:v:10:y:2014:i:02:p:92-103
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    More about this item

    Keywords

    Macroeconomic policy. Financial crises. Great depressions;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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