Christina Romer on the Great Depression and Now
By Arnold Kling
though the current recession is unquestionably severe, it pales in comparison with what our parents and grandparents experienced in the 1930s. Last Friday’s employment report showed that unemployment in the United States has reached 8.1%–a terrible number that signifies a devastating tragedy for millions of American families. But, at its worst, unemployment in the 1930s reached nearly 25%. And, that quarter of American workers had painfully few of the social safety nets that today help families maintain at least the essentials of life during unemployment. Likewise, following last month’s revision of the GDP statistics, we know that real GDP has declined almost 2% from its peak. But, between the peak in 1929 and the trough of the great Depression in 1933, real GDP fell over 25%.
She says much more that is of interest. Thanks to Greg Mankiw for the pointer.